The founder of a Rye investment firm has been accused of stealing more than $20 million from a Manhattan bank.
U.S. Attorney Damian Williams charged John A. Hanratty, 49, with bank fraud and wire fraud in a Dec. 15 criminal complaint. He was arrested Dec. 18 in Puerto Rico.
Hanratty was licensed as an attorney in 2002 and served as chief compliance officer for Options Trading Associates, Purchase, from 2002 to 2018. In 2010, he formed Ebury Street Capital, in Rye.
Ebury was in the business of buying municipal tax liens and managing real estate.
Local governments create the liens when real estate owners are delinquent on their property taxes. Investors buy the liens at public auctions, according to the criminal complaint, because they can pay interest rates up to 36% annually until the property taxes are repaid, or because they can gain ownership of the properties through foreclosure proceedings.
From 2017 to 2019, a subsidiary of Emigrant Bank in Manhattan approved $20 million in credit for Ebury, for buying tax liens.
The liens were offered as collateral, and Hanratty summarized their value on spreadsheets submitted to the bank. But he listed liens that Ebury did not own, according to the criminal complaint, and double-counted liens it did own.
A 2021 spreadsheet, for instance, allegedly listed 6,782 tax liens when Ebury only controlled 518, according to a complaint filed by Emigrant Bank last year in Manhattan Supreme Court.
Instead of using the bank credit to buy more liens or for ordinary business expenses, the criminal complaint states, Hanratty paid back investors who were threatening to sue Ebury.
In 2019, investors did just that. Several New Jersey trust funds that had contributed nearly $3 million for Ebury partnerships, beginning in 2015, sued Ebury in Westchester Supreme Court.
When they exercised their right to withdraw from the partnerships and collect profits in 2018, Ebury issued 15 checks totaling more than $4.4 million, according to the civil complaint. But Ebury had sufficient funds to cover only two checks totaling $350,000.
Hanratty had exhausted the line of credit, according to the criminal complaint, and owed Emigrant more than $20 million in principal and interest.
He moved to Puerto Rico in 2019, and sold his house on Halsted Place, Rye, for more than $1.5 million in 2020. Ebury, according to a New York corporation record, is now based in San Juan, PR.
Hanratty did not reply to an email asking for his side of the story.
