For Immediate Release - March 17, 2014

Former Personal Banker Pleads Guilty, Sentenced to Prison for Stealing Millions of Dollars From Investors, Customers

Sentenced to Three to Five Years in State Prison

WOBURN – A former personal banker at Bank of America has pleaded guilty and been sentenced to three to five years in state prison for stealing more than $2.1 million from 31 investors and customers, Attorney General Martha Coakley announced today. During the scheme, the defendant conducted fraudulent transactions worth approximately $6 million and made payments back to investors and customers of nearly $3.8 million.

“This defendant’s gross violation of trust negatively impacted more than 30 victims, many of whom were her friends and family, and others who were long-time and often elderly customers,” AG Coakley. “Through today’s state prison sentence, she is being held accountable for her deceitful and illegal actions.”

Elaina Patterson, age 54, of Wilmington, pleaded guilty today in Middlesex Superior Court to the charges of Larceny over $250 from a Person over Sixty (15 counts), and Larceny over $250 (16 counts).

After the plea was entered, Superior Court Judge Peter Lauriat sentenced Patterson to three to five years in state prison, with ten years of probation to serve upon completion of her sentence. Judge Lauriat also imposed the probationary condition that Patterson be prohibited from working in the financial services field. A restitution hearing will be scheduled and held at a later date.

The AG’s Office began an investigation in November 2011 after the matter was referred by Bank of America during its initial internal investigation. Patterson worked as a personal banker at a bank branch in Reading, which was initially Bank of Boston, and later became Fleet Bank and then Bank of America. Between July 1999 and September 2011, Patterson made approximately $6 million in fraudulent transactions involving 31 investors and customers.

At the beginning of the scheme, Patterson persuaded family and friends to invest their money in accounts that she characterized as offering high interest rates, normally between 10 and 15 percent. Patterson regularly portrayed these accounts as being exclusively for high-level investors and corporations, but said that due to her position at the bank, she was able to set up these accounts for family and friends.

The investigation revealed that Patterson convinced 15 family members and friends to invest nearly $4.5 million as a part of this scheme, and that she issued fake certificate of deposit receipts and Form 1099s on bank forms to make the investments appear legitimate. In a number of instances, Patterson set up accounts in the investors’ names without their knowledge, put her own address on the accounts, deposited the investors’ funds, and used the money both to fund payments to other investors and to funnel money into her personal accounts.

Further investigation revealed that beginning in 2009, Patterson began stealing money from the accounts of customers, many of them elderly, in order to conceal her previous theft from investors.

In one case, Patterson stole more than $95,000 from a 90-year-old customer by forging his signature on withdrawal slips. Patterson also stole $220,000 from certificate of deposit (CD) accounts of a 90-year-old woman by similarly forging the woman’s signature. In another case, Patterson withdrew more than $300,000 in 10 separate withdrawals from a woman’s account by forging the woman’s signature.

Patterson stole almost $1.5 million from 16 different customers by forging signatures on withdrawal slips. She used approximately $400,000 of this amount to repay customers she had stolen from earlier in the scheme and the majority of the balance of that stolen money to fund “interest payments” and other payments to the investors. 

In the end, investigators uncovered a total of approximately $6 million in fraudulent transactions. Patterson made payments back to customers and investors of almost $3.8 million, leaving the total net theft at more than $2.1 million.

A Middlesex County Grand Jury returned indictments against Patterson on June 24, 2013. She was arraigned in Middlesex Superior Court on July 16, 2013. She pleaded guilty and was sentenced in Middlesex Superior Court today.

The case was prosecuted by Special Assistant Attorney General Molly Parks and Assistant Attorney General Ed Beagan, Chief of the AG’s Fraud and Financial Crimes Division and was investigated by Investigators Kevin Floster and Jaclyn Morrill and Director Sallyann Nelligan of AG Coakley’s Financial Investigations Division, with assistance from members of the Massachusetts State Police assigned to the AG’s Office and the Reading Police Department, the AG’s Computer Forensic Laboratory, and Victim Witness Advocates Amber Foley and Shannon Legrice of the AG’s Victim Services Division. Bank of America cooperated in the investigation.

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