Man Defrauds West Chester Bank of $2.5 Million
Ordered to pay $747,000 in restitution after the First National Bank of Chester County loaned him $2.5 million.
A Plymouth Meeting man was sentenced to 33 months behind bars last week after federal investigators say he defrauded a Chester County bank and four individuals for various real estate loans and investments.
Kelly DeFeo, 43, of the 200 block of Donna Drive, Plymouth Meeting, was found guilty of charges involving conspiracy, false statements, and mail fraud by a jury in the U.S. District Court of Eastern Pennsylvania last spring. He was sentenced last Wednesday by judge Norma Shapiro to 33 months in prison, followed by five years of supervised release, and was ordered to pay $747,000 in restitution to his victims.
According to a release from the Internal Revenue Service's Philadelphia Field Office, DeFeo was a general contractor and real estate developer in the Philadelphia area. Beginning in 2006, DeFeo conspired with his accountant, William Easton, to file several false tax returns with the First National Bank of Chester County in order to secure $2.5 million dollars in loans and extend their maturity over several years.
Specifically, DeFeo applied for a $2 million, one-year loan for a property at 1905 Skippack Pike, Blue Bell and a $500,000, five-year loan for a property at 351 North Charlotte Street, Pottstown. The falsified tax returns showed DeFeo's income to be much higher than what was accurately reported to the IRS, to the tune of several hundred thousand dollars.
DeFeo also received $75,000 each from four individual investors, under the pretense that he would use the funds to purchase the Devon Shire Apartments, located at 701 Burmont Road, Drexel Hill. However, DeFeo instead transferred the majority of those funds to a personal bank account and used them to pay personal and unrelated business expenses, investigators said.
The case was investigated by the IRS and the United States Postal Inspection Service and was prosecuted by Assistant United States Attorney David Axelrod and Assistant United States Attorney David Ignall.