DENVER—Gregory William Bell, age 54, of Weld County, Colorado, was sentenced yesterday by U.S. District Court Judge Lewis T. Babcock to serve 30 months in federal prison for false bank entries, bank misapplication, bank fraud, and money laundering, the United States Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the FDIC-Office of Inspector General announced. Following his prison sentence, Bell was ordered to spend three years on supervised release. Judge Babcock has scheduled a hearing on June 12, 2013, to determine how much and to whom the restitution Bell could be ordered to pay should go to.
Bell was charged by information on December 12, 2012, and pled guilty on February 5, 2013. According to the facts contained in the information as well as the stipulated facts contained in the plea agreement, Gregory Bell was an officer of New Frontier Bank, which was insured by the Federal Deposit Insurance Corporation. On October 31, 2005, Bell made a false entry in a bank book, report, or statement with intent to defraud the bank and deceive one or more of the bank’s officers. Specifically, the defendant allegedly prepared a form entitled “Credit Presentation and Committee Approval” for a $5,583,500 loan to two individuals on which he failed to disclose that a certificate of deposit, the value of which was $106,759, which the two individuals pledged as collateral, in fact belonged to another individual and that Bell would benefit personally as a result of the loan. On March 14, 2008, Bell willfully misapplied approximately $662,045.79 of New Frontier’s funds.
On June 17, 2008 and continuing until September 9, 2008, Bell devised and participated in a scheme to defraud the bank and to obtain money owned by and under the custody and control of the bank by means of materially false and fraudulent pretenses. As part of the scheme, Bell, knowing that state and federal regulators had directed New Frontier Bank to raise capital, arranged for eight bank customers to borrow money from the bank and use the proceeds of those loans to purchase shares of bank stock so New Frontier could inject some of the money paid for the stock into the bank. As part of the scheme, Bell failed to disclose the deteriorating condition of the bank to its customers. He also prepared and caused others to prepare bank forms entitled “Credit Presentation and Committee Approval” for the eight loans described above. Bell failed to disclose on the credit presentation forms that proceeds of the loans would be used to purchase shares of stock in New Frontier Bancorp.
Bell also allegedly caused false and misleading statements to be included on the credit presentation forms. He presented the credit presentation forms to bank loan committees and caused other persons to present them to bank loan committees. As part of the scheme, Bell caused the bank to loan approximately $20,145,979.23 to the eight borrowers mentioned above and caused those borrowers to use approximately $4,310,215 of those proceeds to purchase shares of stock in the bank. On August 29, 2008, Bell executed a scheme by causing the bank to transfer approximately $260,000 of the proceeds of one of the bank loans to an account of one of the borrowers of that loan.
On June 27, 2008, Bell conducted a financial transaction affecting interstate commerce. Specifically, he deposited a check in the amount of $160,000 into his account at the bank. The transaction involved the proceeds of a specified unlawful activity, knowing that the transaction was designed in whole or in part to conceal and disguise the source and the ownership of the proceeds of the unlawful activity.
“Those responsible for bank failures were also ultimately responsible for the weakening of our economy,” said U.S. Attorney John Walsh. “Thanks to the hard work of the Assistant U.S. Attorneys, the FBI, IRS-Criminal Investigation, and the FDIC, the officer of one of these failed banks has been held personally accountable, is now a felon, and will spend time in federal prison.”
“This case demonstrates the FBI’s continued commitment to investigating bank fraud violations,” said FBI Denver Acting Special Agent in Charge Steven Olson. “We place a high priority wherein senior bank officials utilize their positions to defraud financial institutions for personal gain. These criminal acts undermine our banking system and will be aggressively pursued.”
“This sentencing is a direct result of outstanding teamwork between IRS-CI, FBI, FDIC-OIG, and the U.S. Attorney’s Office in combating violations of federal law,” said Stephen Boyd, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office. “This sentence should serve as a deterrent to those who might contemplate similar fraudulent actions.”
This case was investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigation (IRS-CI), and the Federal Deposit Insurance Corporation-Office of the Inspector General (FDIC-OIG).
The defendant was prosecuted by Assistant U.S. Attorney Suneeta Hazra and another prosecutor from the Economic Crimes Section of the Criminal Division of the U.S. Attorney’s Office.