Ex-Youngstown businessman heads to prison for bank fraud

The defendant will report to prison when notified.
YOUNGSTOWN -- Businessman Jeffrey J. Moffie has been sentenced to 37 months in federal prison and ordered to pay more than $1 million in restitution in a bank fraud scheme.
The jury in U.S. District Court that found Moffie guilty in October acquitted his co-defendant, Dale M. Delgado, 39, of Olmstead Falls.
Moffie, 55, of Streetsboro, who once had an interest in the Stambaugh Building in downtown Youngstown, was sentenced Tuesday by U.S. District Judge Peter C. Economus. The judge imposed a $1,000 fine and $1,145,989 in restitution.
Moffie was not taken into custody but will report when notified by the Federal Bureau of Prisons.
Crime details
On Nov. 17, 2004, a federal grand jury in Cleveland returned a four-count indictment against Moffie and Delgado that charged them with conspiracy to commit bank fraud. They were accused of devising a scheme to defraud Bank One in Cleveland by providing false financial information to induce the bank to grant loans to their clients.
The government, represented by James C. Lynch, an assistant U.S. attorney, said the fraud scheme began in January 1994 and continued until the time of the indictment.
In 1993, Moffie and Delgado formed Cambridge Investment Group, a lending consulting business. A public accountant then joined them in a business called WWM Inc., a venture that was to assist clients in obtaining business loans.
Leveraged assistance
The defendants used a "leveraged assistance program" to artificially provide property, which the clients of WWM would use as collateral for loans, the government said.
Moffie and Delgado were accused of buying bonds or other securities on behalf of their clients but paying only 10 percent of the purchase price. They were accused of fraudulently making it appear on financial statements that the clients owned the bonds free and clear, the government said.
When loans went into default, the securities of the clients were unavailable as collateral -- as promised by the defendants -- and Bank One suffered substantial losses, the government said.