Anthony Ottilio of Spring Lake sues Valley National Bank, claiming conspiracy

Nov. 30--Valley National Bank conspired to take over commercial real estate owned by a Spring Lake man and keep it for itself or a customer with inside connections, according to a lawsuit filed earlier this week.

Anthony Ottilio said the bank gave him a mortgage that wasn't conducive to his business; was slow in releasing money to help him rebuild one of his buildings after an accident; fended off his efforts to refinance the loan in favor of insiders; and eventually foreclosed.

The lawsuit was filed on Monday in U.S. District Court. It says Wayne-based Valley National Bank defrauded Ottilio and violated federal racketeering laws.

It comes a month after Michael Ghabrial, a Valley National Bank executive, pleaded guilty to charges in federal court, Eastern District of Pennsylvania, that he accepted a bribe in exchange for agreeing to sell real estate property that the bank owned at a reduced price.

Valley National Bank officials could not be reached for comment on Friday afternoon.

Ottilio owned two buildings and a 7-acre lot in Totowa, and a 15,000-square-foot retail center at 217 Morris Ave. in Spring Lake, according to court documents.

He asked Valley National Bank officials for separate mortgages for each property, but instead was sold cross-collateralized mortgages, meaning if he defaulted on the loan of one property, it would cause him to default on the other properties as well, according to the lawsuit.

In 2005, a 92-year-old man crashed his vehicle into the Spring Lake building, forcing local officials to condemn it. Valley National Bank received $500,000 in insurance proceeds and agreed to pay for the reconstruction, but eventually only paid $400,000, and slowly at that, the lawsuit said.

To finish construction, Ottilio tapped into $200,000 equity from his own home and borrowed another $250,000 from another investor. But by the time the building was ready to be rented again, he had lost more than $1.25 million in rent over five years. He defaulted on the loan, which covered all four properties, the lawsuit said.

Foreclosure

Owed more than $4 million, Valley National Bank began to seize the rent and foreclose. Andrew B. Abramson and Robert C. Soldoveri, both Valley National Bank directors, showed interest in buying the Totawa property, and Hans Kretchman, who also had connections to a Valley National Bank loan officer, showed interest in buying the Spring Lake property, the lawsuit said.

Valley National Bank purchased the Totawa properties at a foreclosure sale for $100 each. And Kretchman purchased the Spring Lake property at a foreclosure sale for $2.37 million, with at least part of the financing backed by Valley National Bank, the lawsuit said.

Bank officials "intentionally abused their position of trust with (Ottilio) and intentionally guided (him) down a path of financial ruin for their own self-aggrandizement," the complaint said.

Ottilio is seeking $80 million.

Michael L. Diamond; mdiamond@njpress

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