Court tosses one of banker’s three fraud convictions
A federal jury in New York City found Levis guilty in 2010 on two wire fraud counts and a securities fraud count. He was cleared on one wire-fraud count and another was dismissed before jury deliberations began.
The appeals court ruled Wednesday that the trial judge should have let Levis argue that Doral used a hedging strategy that he reasonably believed limited Doral’s financial risks, Bloomberg reported.
Levis was sentenced in November 2010 to five years in prison for his conviction on federal charges of lying to investors in a securities-fraud scheme that cost shareholders billions of dollars.
Levis, 49, a member of the family that founded Doral Financial Corp. in 1972 and built it into the largest mortgage lender in Puerto Rico, was convicted in April 2010. He had served as treasurer and executive vice president of the bank.
The indictment in 2008 outlined a scheme from 2001 to 2005 to manipulate the value of mortgage-related assets to inflate the price of Doral stock
Prosecutors said in the indictment that the stock slide spurred by the unraveling of the scheme bled $4 billion in market value from Doral.