A former leasing executive at Chase Manhattan Corp. has been arrested and charged with embezzling more than $14 million from the bank.

John Stefans, senior spokesman at the bank in New York, confirmed last week that a former top executive of the bank's equipment-leasing unit has been arrested and charged. But he declined to provide any further details, noting that the Federal Bureau of Investigation is still working on the case.

According to wire service reports, Michael Wachs, former senior vice president at Chase Global Leasing, was charged in a criminal complaint with selling three DC-8 airplanes, 485 railroad cars and 338 barges at below market value, and secretly wiring the proceeds to his personal accounts.

He and other unidentified people are charged with obtaining $26.1 million from the sale of the assets. They gave the bank only $11.6 million of the proceeds, according to the charges, embezzling $14.5 million from Chase.

Mr. Stefans said the embezzlement, which was discovered last week, will not have any adverse financial impact on either the bank or any of its customers.

Federal prosecutors in New York have alleged that Mr. Wachs opened secret bank accounts for the proceeds and converted the money into Canadian maple leaf coins and South African Krugerrands, according to wire service reports.

Prosecutors allege the former executive then moved the foreign currency to safe deposit boxes, sometimes at banks other than the ones which received the wired funds.

The FBI arrested Mr. Wachs on Oct. 31. He was released on $1 million bond the next day after an appearance in federal court in Manhattan.

As in a celebrated case two years ago at Chemical Bank, now part of Chase, the fraud was detected relatively quickly. In the earlier case, a foreign exchange trader engaged in unauthorized transactions that cost Chemical more than $70 million in losses. The trader, Victor Gomez, fled to England but was extradited in August and pleaded guilty to a 13-count indictment in September. He is due to be sentenced in December and faces a maximum sentence of 30 years and fines of up to $1 million on each count.

"The issue is not so much that there was a fraud but that Chase was able to catch it," said Charles Wendel, a banking analyst with New York-based Financial Institutions Consulting Inc.

He noted that although employees of a bank can engage in fraud because they have access to information and systems that allow them to skirt internal controls for a period of time, the fraud cannot go on for a very long.

"Banks have very firm internal audits and procedures," Mr. Wendel said. "Somebody who wants to get around them can, but ultimately the bank will uncover the fraud."

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