BANK BRANCH MANAGER PLEADS GUILTY TO EMBEZZLING $650,000 FROM HUDSON SAVINGS BANK;SENTENCED TO FEDERAL PRISON TERM

Boston, MA... A former bank branch manager was convicted today in federal court of misapplication and embezzlement of more than $650,000 from the Hudson Savings Bank and sentenced to a 2 year term of imprisonment.

United States Attorney Michael J. Sullivan; Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of Investigation in New England; and Sara Gibson, Assistant Inspector General for the Federal Deposit Insurance Corporation’s Office of Inspector General, announced that the second part of a hearing begun in August was concluded today with plea of guilty by MILTON J. PEREIRA, age 38, of 45 Vega Drive, Shrewsbury, Massachusetts. PEREIRA pleaded guilty before U.S. District Judge Rya W. Zobel to two counts of misapplication and embezzlement of funds from the Hudson Savings Bank. Immediately after accepting his guilty plea, Judge Zobel sentenced PEREIRA to 2 years in prison, to be followed by 3 years of supervised release. The Government had recommended a sentence of 3 years and 5 months in prison. PEREIRA was also ordered to pay restitution to the bank in the amount of $653,297.

According to statements made by the prosecutor at the hearing held today and in August, PEREIRA was employed by the Hudson Savings Bank from March 1998 through August 2005, and was at different times the Branch Manager of the bank’s Marlborough and Hudson branch offices. The prosecutor told the Court, that, had the case proceeded to trial, the evidence would have proven that over a five year period, PEREIRA tampered with more than 60 customers’ accounts at the Bank, performing or authorizing hundreds of credits and debits, and causing a loss to the Bank of more than $650,000.

According to the prosecutor, PEREIRA withdrew funds from existing customers’ deposit accounts and from active or inactive home equity lines of credit, and he also created false accounts from which he withdrew funds. PEREIRA avoided detection of his actions by repaying credit lines from other customers’ accounts, taking steps to prevent customers from receiving account statements for periods of time, creating false loan statements which were sent to customers, and changing the mailing addresses on loan accounts to addresses controlled by PEREIRA.

The prosecutor told the Court that when customers became aware of unauthorized activity in their accounts, PEREIRA corrected the account by depositing funds from other customers’ accounts, sent a letter to the customer reporting that there had been an “error” in the account, and made a notation in the bank’s internal data system that the account had been fixed and the customer notified.

The case was investigated by the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation’s Office of Inspector General and the Hudson Police Department. It was prosecuted by Assistant U.S. Attorney Mark J. Balthazard in Sullivan’s Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139