Date: 01-01-2024

Case Style:

United States of America v. John Arthur Hanratty

Case Number: 1:23-mj-07566

Judge: U.S. Magistrate Judge in the District of Puerto Rico

Court:

United States District Court for Southern District of New York (Manhattan County)

Plaintiff's Attorney: United States District Attorney’s Office in New York City

Defendant's Attorney:

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Description:

New York City, New York criminal defense lawyer represented the Defendant Charged With Bank Fraud And Wire Fraud

John Arthur Hanratty was the Founder and Managing Director of Ebury Street Capital, LLC (“Ebury Street Capital”), an investment firm with a portfolio primarily comprised of municipal tax liens. At all relevant times, HANRATTY served as the Managing Director and Principal for Ebury Street Capital, which manages two different funds known as Ebury Fund 1 and Ebury Fund 2. HANRATTY has been an attorney licensed to practice law in the State of New York since 2002 and has previously held legal and compliance positions at well-known investment firms and financial institutions, including serving as the Chief Compliance Officer and General Counsel for a trading broker dealer.

Between 2017 and 2021, HANRATTY participated in a fraudulent scheme to steal money from an FDIC-insured bank (“Victim Bank-1”) by drawing down on $20 million in commercial lines of credit that had been extended to Ebury Street Capital. Specifically, HANRATTY made materially false statements on spreadsheets (known as “borrowing base certificates”) submitted to Victim Bank-1 summarizing the value of the municipal tax liens that Ebury Street Capital was offering as collateral for its commercial line of credit. As a result of these false statements on Ebury Street Capital’s borrowing base certificates, Victim Bank-1 paid Ebury Street Capital large sums of money to which it was not entitled. The false statements on Ebury Street Capital’s borrowing base certificates included, among other things, listing large quantities of municipal tax liens on the borrowing base certificates that Ebury Street Capital did not actually own and double-counting municipal tax liens by listing the same liens on multiple borrowing base certificates.

Additionally, although Ebury Street Capital was contractually required to use money from Victim Bank-1 either to purchase municipal tax liens or for ordinary business expenses, HANRATTY actually used portions of the money obtained from Victim Bank-1 to pay off Ebury Street Capital’s investors who were threatening to sue and who, in fact, ended up suing Ebury Street Capital and HANRATTY after Ebury Street Capital was unable to pay investors who were seeking to pull out their investments from the fund.

Ebury Street Capital’s commercial line of credit has now been completely exhausted, and the entity owes over $20 million in principal and interest to Victim Bank-1.

Outcome: The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.

Plaintiff's Experts:

Defendant's Experts:

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