Farmingdale businessman faces charges over $5.8M loan

A Farmingdale clothing distributor has been charged with ripping off an Israeli bank by lying about the collateral for a $5.8-million loan, according to a complaint filed Wednesday in federal court in Brooklyn.

Kwong Hung Lam, also known as Eric Lam, owns New Century Enterprise Inc. of Farmingdale, prosecutors said in a news release.

Lam, 47, of Bayside, Queens, obtained a line of credit from Bank Leumi in September 2006 to finance New Century, an importer and distributor of casual apparel, prosecutors said. Lam personally guaranteed the loan.

By September 2009, Lam and New Century owed $5.8 million and he allegedly assured the bank his inventory and accounts receivable were worth $9 million. When the company went out of business in October, however, the collateral was worth only $100,000, prosecutors said.

Lam pleaded not guilty at his arraignment Wednesday and was released on $500,000 bond, confined to home detention and ordered to surrender his passport.

If convicted, he faces up to 30 years in prison.