Magazine article American Banker

Pa. Bank Sues to Recover $1.7 Million in Overdrafts by a Customer's 6 Firms

Magazine article American Banker

Pa. Bank Sues to Recover $1.7 Million in Overdrafts by a Customer's 6 Firms

Article excerpt

An eastern Pennsylvania bank charges that a customer and six corporations he controls wrote a whopping $1.7 million in check overdrafts this year.

In court papers filed earlier this month, Nazareth (Pa.) National Bank and Trust Co., a subsidiary of First Colonial Group Inc., is accusing Thomas Neely of Pocono Pines, Pa., and the corporations of fraud,

conspiracy, and "wrongfully and tortuously" converting bank funds for their own personal use, possibly in foreign transactions.

The suit, filed in the Court of Common Pleas of Northampton County, claims that the defendants defrauded the bank by depositing overdrawn checks into six corporate bank accounts and then wiring money they didn't have to other trust accounts at the European American Bank and Bank of New York.

The $290 million-asset Nazareth National Bank is seeking full compensation, plus interest from March 31, and punitive damages of at least $50,000. The lawsuit also demands an injunction to prevent further fund transfers out of any of the defendants' accounts so the money will not leave the court's jurisdiction.

The six corporations are New Concepts Development Inc. of Mountainhome, Pa., and Shire Holding Corp., Toneli Associates Inc., Cordex Development Corp., Hopeful Properties Inc., and Cantico International Ltd. - all of which share the same post office box in Pocono Pines.

Mr. Neely could not be reached for comment.

According to the documents, in February and March Mr. Neely deposited 16 checks worth $1. …

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