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Small Long Island Bank Closed; U.S. Seizes Bond Portfolio

June 21, 1989|From United Press International

HEMPSTEAD, N.Y. — Federal agents today shut down a small Long Island bank, seized its $7-billion portfolio of federal mortgages and began investigating the bank's officers on suspicion of fraud.

Agents from the FBI and the U.S. attorney's office raided Guardian Bank N.A. and informed its officers that it was being declared insolvent, said the prosecutor's spokeswoman, Ann Driscoll.

"We are executing search warrants and the federal government is declaring the bank in default under its obligations under the Ginnie Mae program," she said. "We are seizing its mortgage portfolio . . . and its bank records, and we're looking for fraud on the part of a bank officer.

"We're talking a lot of money for a bank that has just one branch on Long Island," she said.

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