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Web of deceit detailed in bank lawsuit

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									www.berksmontnews.com                                                                                                                                                                         The Boyertown Area Times • May 5, 2005                                 3
                                                                                                 Local News

      Web of deceit                                                                                                                                                               Give Your Favorite Mom a
                                                                                                                                                                                  Senior Circle Membership!
 detailed in bank lawsuit                                                                                           Healthy Living
                                                                                                                                                                                  M OTH ER ’ S D AY     IS   S UNDAY, M AY 8 TH


        By Michael Lello               demanded money from him to            increase her line of credit to
                                                                                                                    for the 50+ Crowd                                              It’s the perfect Gift of Healthy Living

       Special to The Times            remain quiet.                         $500,000. The documents false-         Just Got Healthier!                                        for Mothers, Grandmothers, Aunts, Sisters...
                                           Casting a web of deceit           ly listed her as a doctor living in                                                                anyone 50+ looking for a healthier lifestyle!
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Toyota. A new New Jersey home          like many in corporate America:       $400,000 a year and having a           hoping to begin an
and a $40,000 American                 a hard-working, trustworthy           net worth of more than $1 mil-         exercise program,
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Express bill, all on a $65,000-a-      employee doing his best to bet-       lion.                                  more about healthcare,
year salary.                           ter the company and his career.           Mawhinney, the suit says,          or wishing to experience
    That’s the life Edward G.          Referring to Mawhinney, but not       also created a checking account        new travel adventures.
Mawhinney was living thanks to         naming him, at Monday’s annu-         in Cheryl Gsell’s name through         We have a place for you.
the millions of dollars he was         al     shareholders      meeting,     which he funneled funds from
funneling from his employer,           National Penn Chairman Wayne          other fraudulent lines of credit,      Join today for just $15.00
Boyertown-based National Penn          R. Weidner called him "a bright       loans and checking accounts. He
Bank. It’s the picture painted in      individual." Indeed, Mawhinney        forged checks and removed
a civil suit filed last week by the    began working for National            funds from these accounts
bank’s       parent       company,     Penn on August 5, 1996, and           including $275,000 from a line
National Penn Bancshares.              "successfully developed busi-         of credit to purchase his home in
     Mawhinney held a vice pres-       ness" and received "several pro-      January of 2002. In some cases         For Information:
ident title with National Penn as      motions," according to the suit.      he deposited the money into            610-327-7600                                            You’re A Senior. You Enjoy Life. Join Our Circle!
a mid-level loan officer in the        Mawhinney worked in the               accounts belonging to his wife
bank’s private banking division        bank’s retail division in             and his parents Edward W. and
in Philadelphia. The suit alleges      Montgomery and Bucks coun-            Roseanne Mawhinney and "oth-
that Mawhinney, with the help          ties before he became a vice          erwise conveyed" funds to the                                                                             OF TH E GREATER POT TSTOWN AREA
of his wife, Jayne Mawhinney,          president focusing on private         dental companies named in the                                                                           sponsored by Pottstown Memorial Medical Center
and former National Penn               banking and commercial lend-          suit.                                                                                             1600 East High Street • www.pottstownmemorial.com
employees and customers, stole         ing in National Penn’s One Penn           He used the stolen money to
$6.7 million from the bank.            Center branch.                        buy the home, the cars and
    In addition to the civil action,       He resigned on or around          "repeatedly paid his personal
the case is under investigation        Dec. 17, 2004, effective Dec.         American Express bill and other
by the FBI and the Federal             29, 2004, according to the suit.      personal expenses" from Cheryl
Prosecutor’s          office      in       In 2001, Mawhinney began          Gsell’s account. National Penn
Philadelphia, according to             to falsify National Penn cus-         estimates that he converted at
National Penn. Neither govern-         tomers’ loan applications, tax        least $500,000 of the bank’s
ment body has commented on             returns, personal financial state-    money for his own use and his
the case.                              ments and other documents and         wife’s use.
    After       resigning      from    started to forge signatures of            The beginning of the end
National Penn in December,             customers and bank employees              Mawhinney became involved
Mawhinney began working for            in order to "wrongfully gain          with several Philadelphia dental
Sovereign Bank, The Mercury            bank approval for important           firms, many at the same address,
has learned. It was not clear in       amounts of credit for the benefit     437 Chestnut St., Suite 500. He
what capacity he worked at             of himself, Jayne Mawhinney"          created phony loans for the
Sovereign or when he left              and the other defendants, the         companies -- Total Dental
Sovereign. The fraud was dis-          suite alleges. He then completed      Concepts,         Rush      Dental
covered by National Penn in            the line of credit applications,      Associates and Suite Tooth
January and revealed publicly in       applied for approval and drew         LLC, as well as the related
February.                              money from the false lines of         MDC West Real Estate.
    "Mr. Mawhinney was recent-         credit. No National Penn cus-         According to the suit, the "total
ly employed by Sovereign               tomers authorized him to do so,       dental defendants," as the suit
Bank," Sovereign spokesman             the suit says. The suit also says     refers to the group, knew that
Carl Brown said this week in a         that Mawhinney created several        the loans were unauthorized by
prepared statement. "It is our         of these lines of credit for his      National Penn but accepted
bank’s policy that we don’t com-       relatives and defrauded them by       them anyway, and they have not
ment on personnel matters."            stealing their identities as well     made any payments on the
    In     addition       to     the   as funds drawn in their names.        loans.
Mawhinneys, the civil suit                 Most        notable       was         In March 2004, Mawhinney
names: Christine Duvall of             Mawhinney’s manipulation of           created a $1.1 million construc-
Oxford, Chester County; John           documents in the name of his          tion loan for MDC. The suit says
Ferraro           of       Oreland,    sister, Mary Gsell, and his niece,    that the draws on the loan were
Montgomery County; Michael             Cheryl Gsell. For Mary Gsell,         taken from, among other things,
Ayes, Howard Koff, Richard             Mawhinney created a 2002 tax          Mary Gsell’s checking account,
Rush and Mitchel Blumenthal,           return that inflated her income       Cheryl       Gsell’s      checking
as general partners trading as         so that she would qualify for a       account, lines of credit in favor
Northeast          Real      Estate    $600,000 loan he applied for in       of     Mark       and     Maureen
Partnership, of Philadelphia; as       her name; he forged her signa-        Barraclough and other "dummy"
individuals, Ayes, of Bala             ture on both documents. He            accounts and lines of credit cre-
Cynwyd; Koff, of Jenkintown;           falsely reported that she was a       ated by Mawhinney.
Rush, of Bala Cynwyd; and              lawyer with assets of more than           On Dec. 13, Mawhinney cre-
Blumenthal, of Gladwyne; Marc          $500,000. She was unaware of          ated a fraudulent line of credit,
Ayes, of Cherry Hill, N.J.; and        all of this, according to the suit.   signed by Michael Ayes. The
Total Dental Concepts, MDC             Mawhinney had the loan state-         "total dental defendants," the
West Real Estate, Rush Dental          ments sent to him at his One          suit says, had been drawing
Associates and Suite Tooth             Penn Center office so he could        money on it, though, since




                                                                                                                              ZERN’S
LLC, all of Philadelphia.              conceal the fraud from Mary           March, 2004.
    The suit is complicated and        Gsell.                                    Mawhinney created the line
rife with twists.                          The suit alleges that Duvall,     of credit after the fact when he
    Some of the more notable           Mawhinney’s administrative            knew he was leaving National
moments          occurred     when     assistant, and Ferraro, the One       Penn to "cover his tracks" and
Mawhinney opened fraudulent
accounts for his sister and niece,
who live in California, unbe-
                                       Penn Center branch manager,
                                       knew about the fraudulent loans
                                       but did not tell National Penn
                                                                             keep his scheme from bank
                                                                             auditors, the suit alleges. MDC,
                                                                             the suit says, participated in the
                                                                                                                         FARMER’S MARKET  1100 EAST PHILADELPHIA AVE.
knownst to them, in order to           that Mawhinney was receiving          fraud by "executing the line of
steal millions from National
Penn; when Philadelphia dental
                                       the statements. He used a similar
                                       process to create other lines of
                                                                             credit after it had already accept-
                                                                             ed the proceeds of the undocu-
                                                                                                                                                 GILBERTSVILLE
companies accepted fraudulent          credit in his sister’s name, and      mented loan."                                                         610-367-2461
loans from National Penn,              ultimately, $1.8 million of unau-         The loan was used to con-                                                            www.Zerns.com
including one to build a new           thorized credit was created in        struct a building at 1001
facility in Media, through             her name. Cheryl Gsell, mean-         Baltimore Pike in Media.                                                                 DEFINITELY NOT A MALL
Mawhinney, and didn’t pay back         while, applied for and received a     National Penn is seeking a lien
the      loans;       and     when     $6,000 line of credit from            on the property, as well as           REGULAR HOURS: FRIDAY 2 P.M.-10 P.M. • SATURDAY 11 A.M.-10 P.M.
Mawhinney’s              employees     National Penn. Mawhinney then         Mawhinney’s home and vehi-
destroyed documents to help
cover up the scheme before they
                                       submitted false tax returns and a
                                       loan application to the bank to
                                                                             cles.
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