THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, March 26, 1996 TAG: 9603260361
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 35 lines
A small computer leasing firm allegedly duped in a multimillion dollar bank scam by a man who claimed to be a Philip Morris executive filed Monday for Chapter 11 federal bankruptcy protection.
Nelco Ltd. of Richmond was tricked in a scheme by a former Philip Morris Cos. Inc. employee to secure $323 million in loans from at least six banks based in four countries, the FBI alleged last week.
Edward Reiners, who was arrested March 19 in New York, allegedly told the banks that the money would be used to lease computers through Nelco for a top-secret offshore cigarette research project. Among the banks involved were Richmond-based Signet Banking Corp., NationsBank of Charlotte, N.C., the Bank of Montreal and the Long Term Credit Bank of Japan.
``In this whole fraud scheme, we're the little company in the middle,'' Nelco spokesman Mike McRaney said. ``We're victims just like the lending institutions.''
Nelco President and Chief Executive Officer Richard A. Nelson wouldn't say how much the privately held company may have lost, but said losses were substantial.
The skeleton filing did not list Nelco's assets and liabilities, according to the Richmond Times-Dispatch. The company has 15 days to file that information.
KEYWORDS: BANK SCAM FRAUD by CNB