NEWARK - A Middletown attorney once tapped by Gov. Chris Christie to the state Banking Advisory Board has pleaded guilty to criminal charges in a multimillion-dollar bank fraud scheme that overlapped her nomination.

Donna M. Conroy pleaded guilty Wednesday to “one count of conspiring to make false entries to deceive a bank and bank regulators, and to influence those regulators, and one count of making false entries,” according to a prepared statement from the U.S. Attorney’s Office for the District of New Jersey.

Conroy, a Cranford attorney who lives in Middletown, was nominated by the governor in May 2010 to serve on the state Banking Advisory Board, an advisory panel. Her nomination was withdrawn that October – when, according to court documents, a conspiracy to defraud the Federal Deposit Insurance Corp. was in full swing.

Conroy thanked the governor and withdrew as a candidate in an Oct. 13, 2010, letter forwarded by the Governor's Office.

"Although I truly appreciate this honor to serve, due to personal reasons, I respectively must withdraw my nomination at this time," she said. "Please know that I welcome future consideration for such a nomination at a later date."

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Between 2009 and 2010 Conroy and several other people conspired “to fraudulently infuse $7 million of capital” into First State Bank, according to the U.S. Attorney’s Office announcement.

Conroy was a shareholder with the bank and “attended practically every meeting of the Board of Directors,” according to a federal complaint from the bank for judicial malpractice. She and the firm had acted as legal counsel for the bank, according to the complaint.

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“In the second phase of the scheme, various conspirators caused FSB to make millions of dollars in loans based on material misrepresentations in order to cover up the fraudulent nature of the capital infusion and end inquiries from FSB’s auditors,” according to the U.S. Attorney's Office. Finally, Conroy and her squad tried to lie to federal regulators and bank officials.

The FDIC shut down First State Bank on October 14, 2011, the agency announced the same day.

How it began

In September 2009, the bank wired $12 million to Primanagement LLC, the company of its newly hired investment adviser, Albert Gasparro, according to court documents from a banking suit against Conroy and her firm filed by the FDIC in 2012.

A few weeks later, three different companies invested the $7 million in First State Bank, which needed the capital to avoid getting put into receivership by federal and bank regulators, according to court documents.

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The thing was, all that new, lifesaving capital was the bank’s own money.

The three businesses “were interrelated and subject to control by Gasparro,” the FDIC wrote in a joint discovery plan.

Gasparro returned the bank’s $12 million – but not before First State Bank loaned the three ostensible investment companies a total of $9.3 million, according to the FDIC.

Conroy is facing a possible maximum prison term of 35 years and fines of $1.25 million or “twice the gross loss sustained by any victim,” according to the district attorney’s announcement.

Conroy's history with Christie

A website for Conroy's firm – formerly, at least, Frieri, Conroy & Lombardo – is no longer available online but an archived version indicates that Conroy went to law school at Seton Hall University.

Conroy was admitted to the New Jersey Bar Association in 1986, the year before Christie took home his law degree from Seton Hall. Conroy’s status is active, according to a state attorney index.

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Conroy donated $6,900 to Christie’s campaigns and inaugurations over the years, as well as a combined $2,950 to Republican state Sens. Joseph Kyrillos and Jennifer Beck, both R-Monmouth, and the Republican State Committee, according to state Election Law Enforcement Commission records.

Brian T. Murray, a spokesman for Christie, offered a prepared statement in response to a series of questions about the governor's interaction with Conroy.

"The Governor has no recollection of Ms. Conroy from either law school or any time subsequent to that, and there was never a personal or professional relationship. She is among thousands of people who have donated to his campaign over the past eight years, and among thousands of people considered for nominations over that time," Murray wrote in an email. "She was recommended to the Governor for a nomination to the advisory board, but she withdrew her name shortly after being nominated."

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The Banking Advisory Board "advises and makes recommendations to the Commissioner of Banking and Insurance on banking matters, legislation and procedures," according to the state's website. "In addition, the Board shall offer proposals to the Governor on legislation that affects institutions subject to the jurisdiction of the Department."

Conroy’s defense attorney, John C. Whipple of the Morristown firm Whipple Azzarello LLC, was not immediately available for comment Thursday.

A person who answered the phone number listed for Frieri, Conroy & Lombardo referred to it as “Frieri Law,” and did not confirm whether Conroy still practiced there.

Phone numbers listed in Conroy’s name had been disconnected or went unanswered

FDIC vs. Frieri, Conroy & Lombardo: Joint discovery plan | Discovery (Law) | Deposition (Law)

First State Bank vs. Frieri Conroy & Lombardo

Conroy Information | Troubled Asset Relief Program | Banks

Alex N. Gecan: 732-643-4043; agecan@gannettnj.com; Contributing: Susanne Cervenka; Mike Davis; Bob Jordan; Michael L. Diamond