CRM

FOR IMMEDIATE RELEASE 202-514-2007

FRIDAY, NOVEMBER 4, 1994 TDD 202-514-1888

JURY CONVICTS THREE IN GULF FEDERAL SAVINGS BANK FRAUD CASE

NEW ORLEANS -- The Department of Justice announced today that

a jury New Orleans, Louisiana, returned guilty verdicts on all 10-
counts of an indictment against John Mmahat of New Orleans, former
Gulf Federal Savings Bank board chairman and presently a practicing
attorney; Joseph Mmahat Jr., of Kenner, former Gulf Federal
president; and William Mulderig of Suffern, New York, a law school
graduate and borrower from Gulf Federal.
The jury found the defendants guilty of a conspiracy to
misapply funds of Gulf Federal, to make false entries in Gulf
Federal's records and to make false statements to the Federal
Savings and Loan Insurance Corporation. In addition, the jury
returned a guilty verdict on nine counts of misapplication of Gulf
Federal's funds, false entries in Gulf Federal's records and a
false statement for the purpose of influencing the federal bank
examiners.
The indictment alleged that the defendants engaged in a
conspiracy to deceive federal examiners in connection with loans
totalling in excess of $4.6 million made by Gulf Federal in
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December 1984, to shell corporations controlled by William
Mulderig. The loans to Mulderig removed delinquent loans from Gulf
Federal's books and served to conceal the true financial condition
of the bank, which failed in 1986. Evidence was introduced at the
trial that John Mmahat traded questionable loans at Gulf Federal
for similar loans made by First Progressive Bank, also a failed
financial institution.
The investigation was conducted by the FBI and the case was
prosecuted by assistant U.S. Attorneys Eileen Gleason and James R.
Mann of New Orleans, and by Donald B. Mackay and James J. Nixon,
trial attorneys of the Justice Department's Criminal Division,
Fraud Section, in Washington. The investigation of transactions at
Gulf Federal and First Progressive Bank is continuing.
John Mmahat faces for up to 45 years in prison and fines
totalling $55,000. Joseph Mmahat Jr., faces up to 10 years in
prison and $30,000 in fines. William Mulderig could receive up to
17 years in prison and up to $30,000 in fines. The defendants also
could be required to make restitution to any victims of their
crimes. Sentencing is scheduled for January 11, 1995.
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