Five days after their trial began, two Connecticut real estate developers pleaded guilty in federal court in Hartford to defrauding a bank of $7.8 million from 1987 through 1990.
Kenneth S. Schwartz, 54, and Leonard Ginsberg, 61, both of West Hartford, also admitted making false statements to deceive the Federal Deposit Insurance Corp.
Each man faces a maximum sentence of 20 years in prison and a $1 million fine on each major count. They are to be sentenced in early September.
The two men were partners in commercial real estate deals during the late 1980s. Mr. Schwartz was a director of Landmark Bank and chairman of its bank loan committee, and Mr. Ginsberg was a director of Suffield Bank.
Prosecutors charged that in seeking $7.8 million in unsecured loans, Mr. Schwartz and Mr. Ginsberg submitted false financial statements inflating their net worth. The two were accused of overvaluing their properties, reporting false results of appraisals, and claiming as assets property they didn't own. The men claimed to be worth between $10 million and $32 million.
Hartford-based Landmark, which was founded in 1984, failed in March 1991 after several real estate loans went sour, including those to the two developers. Suffield Bank also failed, in September 1991, but had no loans to the two men.