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Chicago banker Stephen Calk made false statements to banking regulators last year about his interest in getting a job in the Trump administration, according to an indictment that was unsealed Thursday.
Calk, who at the time was CEO of the Federal Savings Bank, faces one count of financial institution bribery. The 54-year-old banker denied wrongdoing in a statement issued Thursday by his lawyer.
The charge, which carries a statutory maximum sentence of 30 years in prison, stems from Calk’s dealings with Paul Manafort, the former Trump campaign chair who was later convicted of bank and tax fraud. At Manafort’s trial last summer, prosecutors laid out evidence that Federal Savings approved $16 million in mortgage loans to Manafort because of Calk’s own political ambitions.
While Manafort’s application for $6.5 million in loans was pending at Federal Savings, he allegedly recommended Calk for a potential job in the incoming Trump administration. Calk did not ultimately get any such job.
“His attempts at petitioning for political favors was unsuccessful in more ways than one — he didn’t get the job he wanted, and he compromised the one he had,” FBI Assistant Director William F. Sweeney Jr. said in a press release Thursday.
The 26-page indictment contains new information about the alleged scheme and its aftermath.
In July 2018, shortly before Manafort went on trial, Calk met with two senior supervisors from the Office of the Comptroller of the Currency, which is the bank’s primary regulator, and falsely asserted that he never wanted to be hired for a position in the Trump administration, according to the complaint.
Potential administration jobs for Calk that were discussed included Treasury Secretary, Army Secretary and Secretary of Housing and Urban Development, according to testimony and evidence presented at Manafort’s trial.
Calk’s indictment does not name Manafort, but it states that an individual who matches his description contacted a representative of the presidential transition team’s executive committee on or around Dec. 15, 2016 and asked the official to arrange an interview of Calk for Secretary of the Army.
The unnamed transition official allegedly said that another candidate was likely to be nominated for the post, but agreed to arrange for Calk to be interviewed for Under Secretary of the Army. The indictment indicates that Manafort did not disclose to the transition official that he had a loan application pending at Calk’s bank.
After the $6.5 million loans closed, Calk interviewed for Under Secretary of the Army, according to the indictment. “The interview took place on or about January 10, 2017 and was conducted by three representatives of the Presidential Transition Team at the transition team’s Manhattan offices,” the indictment states.
Prosecutors also allege that Calk made false or misleading statements during a meeting with OCC examiners in 2017. Calk allegedly told the examiners that the bank had not been aware that a Brooklyn property that secured the $6.5 million in loans has been in foreclosure, when in fact he knew that the prior loans had been in default and accrued hundreds of thousands of dollars in penalties.
The indictment states that Calk authorized a maneuver that the $395 million-asset bank had never previously performed in order to issue the loans without violating the bank’s legal limit on loans to a single borrower.
The maneuver allegedly involved the bank’s holding company, National Bancorp Holdings, which Calk controlled, and which acquired a portion of the loans from the bank.
Calk is scheduled to appear in federal court in Manhattan on Thursday afternoon. His lawyer, Jeremy Margolis of Loeb & Loeb, called the charge baseless and predicted that Calk will be exonerated at trial.
“The loans made to Mr. Manafort by The Federal Savings Bank were good loans: over-collateralized, approved by the bank’s loan committee with high rates of interest and huge cash prepayments, and approved by the underwriters as being well within the bank’s underwriting guidelines,” Margolis said in a written statement.
“Moreover, Mr. Manfort’s introduction to The Federal Savings Bank had nothing to do with Mr. Calk. He originally came to the bank through a mortgage broker and a loan officer without Mr. Calk’s involvement or knowledge. Those loans were not a bribe for anything,” Margolis added.
In a separate statement, Federal Savings Bank described Calk as its former chairman and said that he has been on “a complete leave of absence and has no control over or involvement with the bank.”
“Further, there is no suggestion of any wrongdoing on the part of the bank,” the bank said in its statement, adding that Special Counsel Robert Mueller, who prosecuted Manafort, and a federal judge have determined that the bank was a victim of Manafort’s crimes.
On Thursday, Calk was no longer listed as CEO on Federal Savings’ website, and his LinkedIn profile stated that his tenure as CEO ended this month. The bank’s website now lists his brother John, who has served as the bank’s vice chairman, as CEO.
An OCC spokesman declined to comment on the indictment, saying in an email that the agency will not comment on such matters pertaining to specific individuals.
Updated May 23, 2019 at 1:36PM: This story has been updated to add comments from both The Federal Savings Bank and Stephen Calk’s lawyer.
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