THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, April 3, 1996 TAG: 9604030392
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: WHITE PLAINS, N.Y. LENGTH: Medium: 58 lines
A former Philip Morris employee accused of duping at least six banks in four countries out of millions of dollars has agreed to return to Virginia to face fraud charges.
Edward Reiners, 51, of Somers, N.Y., waived extradition at a proceeding late Monday before U.S. Magistrate Mark D. Fox in U.S. District Court in White Plains, said Marvin Smilon, a spokesman for U.S. Attorney Mary Jo White.
Reiners, who was held without bail Tuesday in New York, will be brought to Virginia as soon as the U.S. Marshal's service can arrange it, said the U.S. Attorney's office for the Eastern District of Virginia. Prosecutors would not comment on when the trip might take place.
Within seven days of his return, Reiners will likely face a preliminary hearing in federal court in Richmond, authorities said.
According to an FBI affidavit, Signet Banking Corp., NationsBank Corp. and other banking companies, including CoreStates, Bank of Montreal, Credit Anstaldt of Austria and Hitachi American Credit and Long Term Credit Bank of Japan approved loans totaling $323.5 million.
Reiners, who worked in Philip Morris' information systems division in Richmond until 1992, allegedly posed as a Philip Morris executive to convince the banks that the company needed loans to finance computers for a super-secret cigarette research and development project.
The project was so confidential, Reiners allegedly told the bank officials, that it could not be based inside the United States.
The FBI and Philip Morris said there is no such secret project.
Bank officials said the standing of the giant tobacco and consumer products company mitigated lenders' concerns about the confidential nature of the research project Reiners described.
Signet, which is based in Richmond, said it had approved $81 million in loans for Reiners. Nations-Bank, which is based in Charlotte, had agreed to provide more than $60 million in financing. The FBI and the banks said they expect to recover much of the money they loaned.
Nelco Ltd., a small Richmond computer company the FBI also said had been tricked in the scheme, last week filed for Chapter 11 federal bankruptcy protection because of losses the company claims it suffered.
Last week, investigators traced millions of dollars in loans Reiners received to Centralized Computer Services Inc. in New York City. Judd Burstein, an attorney for Centralized Computer Services, said the company has worked with the government to return nearly $200 million.
Reiners was arrested March 19 along with an alleged accomplice, Judy R. Bachiman. If convicted, they could get up to 30 years in prison and a $1 million fine.
Bachiman, 38, of Cliffside Park, N.J., was released earlier on a $40,000 bond and was to arrange her own surrender in Virginia, Smilon said. by CNB