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The second money laundering scheme, which for purposes of the
1992 plea bargain with the U.S. Attorney's Office could not be
proven, involved payments to Westco Manufacturing Co. (Westco) in
California during 1989. Mr. Zaban paid his friend Roy Burger
$41,569, and in exchange, Westco, for whom Mr. Burger worked and
was earning commissions, paid Zaban Enterprises with checks
totaling $41,569. Mrs. Zaban was aware of these transactions and
the deposits of checks from Westco to Zaban Enterprises. Mrs.
Zaban believed that these were consulting fees for work performed
by Mr. Zaban for Westco, but she did not know the nature of the
work performed by Mr. Zaban.
3. Bank Fraud
In early 1988, petitioners decided to acquire a new home.
Mrs. Zaban met with Kathryn Gerling, president of Midstate Savings
and Loan (Midstate), to begin the process of applying for a loan.
(To a large extent Mrs. Zaban negotiated the terms of the loan with
Ms. Gerling.) On February 26, 1988, petitioners submitted an
application to Midstate for a $101,000 acquisition loan to purchase
a residential lot in Lutherville, Maryland. The loan application
listed monthly income of $12,200, assets of $683,293.65, and a net
worth of $520,325.65.
On or about August 23, 1988, petitioners submitted an
application to Midstate for a $528,700 construction loan to build
their home on the lot in Lutherville, Maryland, pursuant to a
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