Ex-UNC hoops player on trial in fraud

Courtney Dupree, a former University of North Carolina basketball player who hosted a pricey 2008 fundraiser for the Obama campaign, defrauded a bank out of $18 million by cooking the books at his Long Island City lighting supply company, prosecutors said in opening statements Tuesday in federal court in Brooklyn.

Dupree, 42, of Manhattan, and co-defendant Thomas Foley, 43, a lawyer, are charged with a scheme to concoct phony accounts receivable for the business, GDC Acquisitions, to open and maintain an $18 million line of credit with Amalgamated Bank when their business couldn't support it.

"This is a case about lying to a bank to get money," said prosecutor David Woll. "It is about telling lies over and over to get millions in the bank's money."

Dupree, who played under legendary coach Dean Smith, hosted a fundraiser for then-presidential candidate Barack Obama for $1,000 and $2,300 donors at his Manhattan apartment that was attended by top Obama aide Valerie Jarrett. He gave $2,300 to Obama, which was donated to charity after his indictment last year. The donations are unrelated to the charges.

Defense lawyers told the jury that Dupree was a successful minority entrepreneur and Wharton School graduate whose trust was betrayed by former chief financial officer Frank Patello of East Williston and a company accountant, both of whom have pleaded guilty and will testify for the government.

The two cooperating witnesses, defense lawyer Roscoe Howard said, were incompetents who mishandled the company's books and failed to send invoices to customers. "What they've got is two witnesses who were in a job where they were in over their heads," Howard said.

He said that, while problems with the books created a chaotic situation on the eve of a bank audit in 2010, Dupree never intended to defraud Amalgamated and met the loan terms until the FBI shut his company down. "Amalgamated Bank was being repaid on time, and had been every month, and the bank was not complaining," Howard said.

Foley's attorney said he worked as a chief operating officer at GDC, focused on cost-cutting initiatives, and had nothing to do with any misstatements of receivables to the bank. The trial of a third co-defendant, former chief investment officer Rodney Watts, has been postponed.

They are charged with conspiracy and bank fraud.