Signet Banking Corp. and NationsBank Corp. said Wednesday they expected "substantial" recoveries from their exposures to a $323.5 million fraudulent loan scheme perpetrated by a couple pretending to work for Philip Morris Cos.

But Signet, the lead bank in the loan, may have to restate its 1995 earnings as a result of its $81 million exposure.

NationsBank put its current exposure at $61.3 million.

The U.S. Attorney's Office for the Eastern District of Virginia stated in a press release that "the exact loss has not been determined," although it "could reach into the hundreds of millions of dollars."

Both Signet and NationsBank said they would be able to cover their remaining losses from current reserves.

Richmond-based Signet also stressed that $173 million of the $254 million balance on the credit had been sold or assigned to the six other lending banks on a nonrecourse basis, meaning Signet was liable only for its own portion.

But analysts questioned the strength of that protection. "It's not clear to me that the other banks are not going to at least start some kind of legal action to put the burden back on Signet," said Livia S. Asher of Merrill Lynch.

Aside from Charlotte, N.C.-based NationsBank, the other lenders are CoreStates Financial Corp., Bank of Montreal, Creditanstalt-Bankverein of Austria, Long Term Credit Bank of Japan Ltd., and Hitachi American Credit.

Sanford C. Bernstein & Co. analyst Moshe Orenbuch said the case leaves Signet with "a huge black eye ... in financial terms as well as in terms of its reputation." Mr. Orenbuch calculated that taking the full $81 million loss, equal to 87 cents a share, would knock 6% off Signet's book value.

Signet's stock fell 75 cents, to $24.25, Wednesday.

As outlined in Justice Department filings, the fraud scheme began unraveling last Friday when NationsBank was contacted by Long Term Credit Bank of Japan. The Japanese bank had questions about a document related to the loan, which involved computer equipment leasing to a subsidiary of Philip Morris.

After looking into the document, NationsBank officials alerted agents of the Federal Bureau of Investigation to a potential forgery. By Wednesday, the FBI decided it had enough evidence to arrest Edward J. Reiners, 51, of Somers, N.Y., and Judy Rose Bachiman, 38, of Cliffside Park, N.J. Each was charged with bank fraud and faces a potential maximum penalty of 30 years in jail, $1 million in fines, and five years of supervised release.

According to the FBI affidavit, the fraud began in 1993 when Mr. Reiners, who had left the employ of Philip Morris the year before, obtained $61 million of financing from Signet. The stated purpose was to help Philip Morris produce "future cigarette alternatives" at a secret, offshore location.

NationsBank and the other lenders joined the credit in 1995 to finance additional computer leases.

One remarkable aspect of the scheme, the banks involved noted, was that Mr. Reiners kept the deception going for more than three years and paid down the credit line on schedule.

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