Thursday, May 31, 2018
Find Out About Free Best Practices Guides for Sports Event Security at SchoolSafetyInfo.org
Banker Shaun Hayes Gets Prison Sentence
St. Louis, MO – Shaun R. Hayes, 58, of Frontenac, was
sentenced to 68 months in federal prison today after pleading guilty to
participating in a scheme to defraud Excel Bank and to profit from illegal
insider loans. The sentence was handed
down by United States District Judge Audrey G. Fleissig who also ordered Hayes
to pay restitution in the amount of $5,048,003.67.
Hayes was charged in April, 2016, along with real estate
developer Michael Litz on bank fraud and related charges involving a series of
insider loans and straw party loans at Excel Bank. The bank failed in October 2012 and Simmons
Bank succeeded it. Hayes and Litz each
entered guilty pleas in January. Litz
was sentenced earlier this month to 36 months in prison. Hayes has been incarcerated since April 2017
when a U.S. Magistrate Judge ruled that he had violated the conditions of his
bond by participating in investment activities without getting clearance from
his bond officer. There is no parole in federal prison sentences.
Excel Bank was a federally insured bank with main offices in
Sedalia, Missouri. Hayes held a
controlling stock interest in the bank which, by 2009, had opened a Loan
Production Office (LPO) in Clayton.
Hayes controlled the loan activities at the LPO. At Hayes’s direction
the commercial and residential real estate lending at Excel Bank increased
dramatically through the operation of the LPO.
As part of his guilty plea, Hayes admitted that many of the loans made
through the LPO were substandard and placed the bank at risk. He also admitted that he engaged in unlawful
self-dealing by causing loans to be made which directly benefitted him and his
associates while concealing his interest in the loans.
As part of his guilty plea, Hayes admitted that he helped set
up a loan at Excel Bank to a straw party in the amount of $3.3 million and
caused some $906,000.00 of the proceeds of that loan to be paid to Centrue Bank
to pay off a loan he and his business associate, Michael Litz, had guaranteed
for their entity McKnight Man I LLC.
Hayes admitted that his interest in the loan was concealed from bank
officials and he and Litz made no payments to Excel Bank. Court documents made part of the guilty plea
record also show that Hayes assisted in causing Excel Bank to make the above
loan and millions of dollars in other loans to straw parties in order to cover
the delinquent and substandard loans owed by Litz’s business, Eighteen
Investments, at other banks. According
to the charges, Excel Bank lost substantial amounts on these loans.
Hayes was also sentenced on an illegal insider loan through
which he and Litz each received $300,000.00.
In April, 2009, they caused Excel Bank to make a loan to Rolling Hills
Apartments LLC which operates an apartment complex in north county. They caused Excel Bank to loan much more than
was needed by the apartment complex in order to create a pool of money for
them. Hayes and Litz structured the payout through several entities so as to
insure that their interests were concealed.
In a sentencing memorandum filed with the court, the
Government informed the court that Hayes was a principal at three banks which
failed in 2011-2012---Excel Bank, Sun Security Bank and Truman Bank. According to the Federal Deposit Insurance
Corporation (FDIC), the federal insurance fund loss for those three banks was
estimated at slightly more than $160 million at the close of 2017. It was also noted to the court that Hayes was
paid $1,863,076 by Excel bank in dividends and fees from late 2007 when he
gained control of the bank through March 2010 when regulators ordered a stop to
the payments.
In its memorandum, the Government also identified the losses
suffered by the longtime employees of Excel Bank when the bank failed and the
bank stock in their retirement plan had become worthless. These employees
relied upon the bank’s stock to provide security for their retirement.
"Shaun Hayes abused his position and defrauded Excel
Bank to enrich himself and his co-defendants. Their unlawful actions not only
caused the bank to fail, but cost hard-working St. Louisans their jobs, homes
and financial security," said Special Agent in Charge Richard Quinn of the
FBI St. Louis Division. "This case is but one example of how the FBI,
along with its law enforcement partners, will relentlessly bring to justice
those who harm our communities."
“The conviction and sentence of Shaun Hayes is an important
reminder that the FHFA-OIG and our law enforcement partners will aggressively
pursue justice in fraud cases which undermine the integrity of and confidence
in our banking system, including those that affect the Federal Home Loan
Banks. We thank our law enforcement
partners for their efforts in bringing justice in this case,” said Catherine
Huber, Special Agent in Charge of the Federal Housing Finance Agency, Office of
Inspector General for the Central Region.
David Anderson, Special Agent in Charge of the Kansas City
Region of the FDIC Office of Inspector General said, “Those individuals who
engage in bank fraud schemes undermine the integrity of the banking and
financial services industry. The FDIC
OIG is committed to stopping these illegal acts.”
“As the majority shareholder who virtually had complete
control of Excel Bank, Shaun Hayes caused devastation by repeatedly abusing his
power to commit fraud,” said Special Inspector General Christy Goldsmith
Romero. “His crime caused millions in losses, threatened the very soundness of
the bank that later failed, and caused bank employees to lose much of their
nest eggs. The bank failure meant that
TARP was never repaid and taxpayers suffered $5 million in TARP losses, all
while he profited from concealing the fraud from regulators. This case is a great example of law
enforcement collaborating to bring justice and I thank our partner U.S.
Attorney’s Office, the FBI, and other inspector general offices.”
The restitution amount ordered by the court consisted
largely of losses incurred by Excel Bank on the straw party loans with most of
the restitution being owed to the FDIC.
Timothy Murphy, the former Executive Vice president at Excel
bank, pled guilty earlier this year to defrauding Excel Bank and was sentenced
to probation based on his cooperation in the investigation.
This case has been investigated by the Federal Bureau of
Investigation, the Federal Finance Agency Office of Inspector General, the
Federal Deposit Insurance Corporation Office of Inspector General and the
Office of the Special Inspector General for the Troubled Asset Relief
Program. Criminal Chief James E. Crowe,
Jr., and Assistant United States Attorney Gilbert C. Sison are handling the
case for the U.S. Attorney’s Office.
Former Associates Of New Jersey Clinical Laboratory Sentenced To 21-Month Prison Terms For Roles In Bribery Scheme
NEWARK, N.J. – Two former associates of Parsippany, New
Jersey-based Biodiagnostic Laboratory Services LLC (BLS) were each sentenced
today to 21 months in prison for their roles in a test referral bribery scheme,
U.S. Attorney Craig Carpenito announced.
Cliff Antell, 43, of Rumson, New Jersey, and Craig Nordman,
39, of Whippany, New Jersey, had previously pleaded guilty before U.S. District
Judge Stanley R. Chesler to informations charging each with one count of
conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and
one count of money laundering. Judge Chesler imposed the sentences today in
Newark federal court.
According to documents filed in this case and statements
made in court:
Nordman was a BLS employee and the CEO of Advantech Sales
LLC – an entity used by BLS to make illegal payments. Antell was an associate
who used an entity – Brown’s Dock Consulting – to disguise the bribe payments
to doctors.
The investigation has resulted in 53 convictions – 38 of
them doctors – in connection with the bribery scheme, which its organizers have
admitted involved millions of dollars in bribes and resulted in more than $100
million in payments to BLS from Medicare and various private insurance
companies. It is believed to be the largest number of medical professionals
ever prosecuted in a bribery case. The investigation has recovered more than
$15 million through forfeiture. On June 28, 2016, BLS, which is no longer
operational, pleaded guilty and was required to forfeit all of its assets.
In addition to the prison terms, Judge Chesler sentenced
Antell to three years of supervised release and fined him $10,000. Nordman was
sentenced to one year of supervised release.
U.S. Attorney Carpenito credited special agents of the FBI,
under the direction of Special Agent in Charge Gregory W. Ehrie in Newark;
inspectors of the U.S. Postal Inspection Service, under the direction of Acting
Inspector in Charge Judy Ramos; IRS–Criminal Investigation, under the direction
of Acting Special Agent in Charge Bryant Jackson in Newark; and the U.S.
Department of Health and Human Services, Office of Inspector General, under the
direction of Special Agent in Charge Scott J. Lampert, with the ongoing
investigation.
The government is represented by Senior Litigation Counsel
Joseph N. Minish; Assistant U.S. Attorney Danielle Alfonzo Walsman, Co-Chief of
the Public Protection Unit; Jacob T. Elberg, Chief of the U.S. Attorney’s
Office Health Care and Government Fraud Unit in Newark; and Senior Litigation
Counsel Barbara Ward of the office’s Asset Recovery and Money Laundering Unit.
Defense counsel:
Nordman: Timothy R. Anderson Esq., Red Bank, New Jersey
Antell: Robert A. Weir Esq., Red Bank
Subscribe to:
Posts (Atom)
Posts
