Va. businessman accused of defrauding banks of millions using fake insurance policies arrested

Va. businessman accused of fraud arrested in Texas

McLEAN, Va. — A Lamborghini-driving steakhouse owner who disappeared after being accused of cheating banks out of tens of millions of dollars was arrested in Texas and returned to Virginia as federal prosecutors pursue fraud charges.

Osama El-Atari is accused of fraudulently securing nearly $18 million in loans from one bank by offering up phony life insurance policies as collateral.

El-Atari was thought to have fled the country in May, but court documents show he was arrested in the Austin, Texas, area on or before Feb. 1 and U.S. Marshals say he has been in custody in Alexandria since last week.

The allegations spelled out in a federal court affidavit could be only the beginning against the flashy businessman, who owned several exotic sports cars and collected traffic tickets while driving them.

“He was not a wallflower,” said Allie Ash, who sold a Lamborghini to El-Atari through his dealership.

In bankruptcy court, creditors spelled out more than $60 million claims against him, mostly from banks.

United Bank, a regional bank with 113 branches in the region, reported a $17.6 million write-off for el-Atari’s bad loans. For a relatively small bank like United the losses were significant, exceeding its most recent quarterly earnings of $17.4 million.

In an affidavit, FBI Agent Mark Stanley stated that El-Atari took out three separate loans from United Bank between December 2007 and November 2008. He told the bank he was using the money for his businesses. He had owned four Original Steakhouse & Sports Theatre locations in Maryland and Virginia at the time.

As collateral, El-Atari purported to offer up life insurance policies that he allegedly held through Lincoln Benefit Life Company, a division of Allstate. He allegedly wrote phony e-mails purporting to be from a Lincoln agent verifying the policies, using e-mail addresses that did not even correctly mimic those used by real Lincoln employees.

Bank CFO Steven Wilson said he was aware of the arrest and appreciated the FBI’s efforts, but would not comment on the case.

Ash said he personally did not lose any money to El-Atari.

“I think it’s a fascinating story but fortunately we did not suffer financially,” Ash said.

El-Atari had been in trouble previously. In 2007, federal agents charged him with “conspiracy to manufacture badges,” a misdemeanor case in which El-Atari was represented by famed defense lawyer Plato Cacheris. El-Atari pleaded guilty and paid a $500 fine. Court records indicate a former counterterrorism officer at the Defense Logistics Agency improperly supplied El-Atari with an official police badge.

Cacheris did not return a call seeking comment.

El-Atari’s many creditors forced him into bankruptcy proceedings last year. The creditors’ lawyer, David Tatge, was out of town and unavailable for comment, according to his office.

One of those creditors was Celebrity Ventures, Inc., a Fort Lauderdale company that develops restaurants in partnership with former Pittsburgh Steelers star Jerome Bettis and other famous athletes.

Celebrity Ventures’ lawyer, Thomas Graner, estimated that El-Atari failed to pay several hundred thousand dollars in royalty fees.

A manager at one of the steakhouses who declined to give his name said Osama El-Atari has nothing to do with the restaurants any more, but in bankruptcy court, creditors allege that El-Atari transferred ownership to his brother “in a secretive manner.”

A phone message for the brother, Belal El-Atari, was not immediately returned Wednesday evening.

Associated Press Writer Jeff Carlton in Dallas contributed to this report.