Ex-Bank Manager Acted Alone in Iraqi Loan Fraud, U.S. Says

WASHINGTON — The former manager of an Italian bank branch in Atlanta who made $5 billion worth of loans that helped build Iraq’s war machine before the invasion of Kuwait acted on his own in exchange for $4.25 million in bribes, the government said Friday.

As a result, federal prosecutors abruptly withdrew plans to seek a lighter sentence for Christopher P. Drogoul, the former manager of the Banca Nazionale del Lavoro branch in Atlanta.

In federal court documents, prosecutors said Drogoul engineered and concealed the massive loan fraud. They said he had not provided “credible evidence” to help prosecute anyone else since pleading guilty in June and cooperating with the government.

Prosecutors said in a 54-page memo filed with U.S. District Judge Marvin H. Shoob that Drogoul had provided no substantial help in trying to prosecute any others and that he engineered the scheme with the help of underlings in Atlanta.

“After reviewing all of Drogoul’s statements and conducting an extensive investigation, the government concluded that Drogoul, in concert with his identified co-conspirators, conducted a massive fraud upon BNL,” the filing said.

The government said Drogoul kept the Iraqi loans from his superiors at the bank in exchange for $4.25 million in bribes paid to him and his family.

Drogoul, whose sentencing hearing is set for Monday, faces up to 390 years in prison. Under federal guidelines, Shoob cannot greatly reduce his sentence without a motion from the government.

According to the government, Drogoul contended in debriefings that bank officers and managers outside Atlanta knew of the loans. However, the government said Drogoul based his opinion on such things as “knowing glances, nods, and smiles.”