Poppi Metaxas, the former chief executive of Gateway Bank in Oakland, Calif., was sentenced to 18 months in prison for perpetrating a scheme involving mortgages.
Metaxas, who also served as the $142 million-asset bank's president, pleaded guilty in April to conspiracy to commit bank fraud,
In 2008 amidst the wake of the financial crisis, Gateway faced scrutiny from federal regulators due to bad loans on its books. Metaxas allegedly caused the bank to enter into a sham loan agreement with the now-defunct Lend America in Melville, N.Y. Lend America was Gateway's largest mortgage lending client at the time.
Between 2009 and 2010, Metaxas and co-conspirators transferred proceeds from the sham loan through wire transfers to satisfy the down payment on three entities owed to the bank in connection with its sale of nonperforming assets and loans. Metaxas also allegedly lied to Gateway's board and provided false testimony to bank regulators when asked where the down payment's funds came from.
Metaxas' defense attorney Laura Birger asked for probation, according to Newsday, claiming that her client merely meant to help her bank rather than profit off the scheme. Birger also noted in court that Metaxas is a grandmother and is recovering from ovarian cancer.
Metaxas did express remorse, telling the judge that the scheme's aftermath "has been much more painful than the cancer that threatened to take my life," Newsday reported.
