Every choice has a consequence. As a business ethics and fraud prevention speaker, I state that during every presentation. Regardless of who you are or what station you may hold in life – you cannot avoid the consequences of your actions or choices. Sure, you may avoid the consequences for a time, but in the end we must always face the consequences of our choices.
On February 4th, 2009 – John A. Yanchek – a licensed Florida attorney pled guilty to conspiracy, making false statements in connection with bank loans, and money laundering. The consequence – Yanchek could face up to 45 years in federal prison (although his sentence will likely be much less).
According to the US Attorney’s news release:
YANCHEK entered into a conspiracy to make false statements to federally-insured banks in connection with applications for commercial loans to fund the purchase of vacant land in the Sarasota/Manatee area for development. The object of the conspiracy was to obtain a loan from a bank in an amount that was sufficient to allow the conspirators to purchase the property without contributing any equity of their own and to receive excess loan proceeds for their personal use and benefit. To influence the lending decision of the various banks, YANCHEK, acting in his legal capacity as the closing attorney, made false statements regarding the financial resources of the borrower, the amount and source of equity contributed by the borrower, compliance with the seller’s obligation to provide marketable title to the property, and distribution of the loan proceeds.
The question now is not one of guilt. Yancheck has made it clear that he is guilty. Rather the question is one of motivation. Why would a licensed attorney risk his license, livelyhood and freedom?
An article written in the HearldTribune.com (linked here) states the following:
Between January 2005 and March 2006, Husani, whose business dealings are being scrutinized by the FBI, completed seven real estate transactions in Manatee and Sarasota counties, buying land for a total of $43 million, reselling it to partners for $117 million and helping them obtain $84 million in bank loans, according to records filed with county courts.
Yanchek, by contrast, bought seven houses for $3.45 million since 2001. He then resold them to companies or trusts he controls for $5.55 million and got $4.46 million in loans from three different banks.
In his most expensive transaction, Yanchek bought a house at 101 Seagull Lane on Bird Key from Christopher and Courtney Campbell for $1.16 million on Dec. 4, 2002.
He then sold the house the same day to 101 of Sarasota Inc., a company he controls, for $2.15 million and got a $1.25 million mortgage from First State Bank.
As a side note – Husani fled the country in 2006.
From external appearances, Yancheck figured out how to defraud banks by watching too many episodes of “Flip That House.” Frankly, however, the three components of a fraud are (1) need; (2) opportunity and (3) rationalization. While I can’t address the orginial “need” motivation, I suspect that over time “need” became money. From the perspective of a fraudster – once one gets the taste for money it becomes nearly impossible to divorce oneself from that need. In Yanchek’s case the “opportunity” component was found in the license and position of trust that he had. There is a fundamental understanding that an attorney is a trusted advisor and ethically should abide by the law. Somehow here that point seems to be missed.
Where from here? Well, Yancheck will be sentenced and considering the financial magnitude, I suspect that he will receive 5 years or more as an active prison sentence.
IF YOU KNOW JOHN A. YANCHECK – and would have any insight into his motivation, feel free to contact me as I am interested in what would motivate such behavior.
YOUR COMMENTS ARE WELCOME!