NEW YORK (Reuters) - A former chief executive of bankrupt food company Synergy Brands Inc was sentenced to 5-1/4 years in prison on Thursday for running a check fraud scheme through U.S. and Canadian banks that caused one institution to lose $26 million.
Mair Faibish, 55, was sentenced by U.S. District Judge Eric Vitaliano in Brooklyn, New York, after being found guilty in 2014 on charges including bank fraud and conspiracy to commit bank and securities fraud, federal prosecutors said.
Prosecutors accused Faibish and co-conspirators of a check-kiting scheme to funnel $1.3 billion in checks backed by insufficient funds through banks.
Brooklyn U.S. Attorney Robert Capers said Faibish “played fast and loose with the truth and with federally insured money, kiting checks back and forth across the Canadian border to defraud auditors, banks, and investors.”
Prosecutors also said Faibish, of Huntington Station, New York, caused Synergy to file false statements with the U.S. Securities and Exchange Commission about Synergy’s financial condition for the second quarter of 2008.
Prosecutors had sought up to the maximum of 80 years in prison.
Bradley Simon, Faibish’s lawyer, said he was pleased with the sentence, saying the judge showed “real common sense and fairness” in rejecting the longer period of incarceration sought by prosecutors.
Synergy, a publicly-traded food products company, was delisted from the Nasdaq in December 2008, and filed for Chapter 7 bankruptcy in January 2011.
According to prosecutors, the check fraud was operated on behalf of Synergy.
Banks would make funds from the bad checks available, enabling Faibish and others to write more checks, which were then transferred to other companies. Signature Bank lost $26 million, prosecutors said.
The case is U.S. v. Faibish, U.S. District Court, Eastern District of New York, No. 12-cr-265.