WOBURN -- A former personal banker on Tuesday pleaded not guilty in Middlesex Superior Court to charges that she swindled more than $2 million from her relatives and elderly customers at the Bank of America branch in Reading.
Elaina Patterson, 53, was charged with 16 counts of larceny of over $250 and 15 counts of larceny from a person over 60 years old. She was released without bail, but prohibited from working in financial services.
Patterson, of Wilmington, used her position as a longtime, trusted employee and a favorite of elderly bank customers to carry off a Ponzi-like scheme for nearly 12 years, according to the court documents. Patterson, who left the bank in 2011, bought Cadillac Escalades, took vacations to Aruba and Las Vegas, stayed at glitzy hotels including the Ritz-Carlton, and paid her children’s college and private school tuitions with the money she allegedly stole from her cousins, aunts, and uncles, as well as elderly customers, according to complaint.
Patterson’s lawyer Michael Smerczynski said his client is cooperating with authorities, noting she had turned over her files to investigators.
Patterson allegedly launched the scheme in the late 1990s by telling family members and their friends that they could earn up to 15 percent interest by putting their money in certificate of deposit accounts that were usually reserved to large companies and wealthy customers, the court documents said.
The victims cashed in savings bonds, withdrew money from other investments, diverted their lottery winnings and tax refunds, and took out mortgages on their homes to invest with Patterson, according to court documents.
Investigators said that Patterson convinced the investors to deal only with her and for many years they agreed to reinvest their supposed interest earnings back into the accounts. Patterson, however, diverted a total of $1 million into her own accounts between 2002 and 2010, and used the money to fund her family’s expenses.
But by August 2009, at the height of the financial crisis, the investors wanted to make large withdrawals from their accounts, which Patterson could no longer cover, according to the complaint. In August 2009, she started to steal money from elderly customers, some of whom were over 80 years old, withdrawing $1.5 million from their accounts, the state alleged.
“She had a keen sense of what money customers had, whether they would be vigilant about reviewing their bank statements, and if so, whether they would direct any questions they had to her, and chose her victims accordingly,†the complaint said.
The scheme started to crumble in the fall of 2011, when a customer came in to ask about her account on Patterson’s day off. A bank employee noticed the account was in the customer’s name but bore Patterson’s address.
The bank investigated the case and after initial denials, Patterson, “turned over her files…and gave written statements describing her conduct,†according to court documents.
Patterson is schedule to appear in court next on Aug. 14.
Deirdre Fernandes can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.com
