A bank CEO has been accused of approving millions of dollars in high-risk mortgage loans in an attempt to land a job in the administration of President Donald Trump.
Stephen M. Calk, founder and CEO of the Federal Savings Bank of Chicago, was indicted Thursday for allegedly approving millions of dollars in loans to disgraced former Trump campaign chairman Paul Manafort in an effort to secure a post in the Trump administration. Manafort is currently serving a 7½-year prison sentence for bank and tax fraud.
“As alleged, Stephen M, Calk abused the power entrusted to him as the top official of a federally insured bank by approving millions of dollars in high-risk loans in an effort to secure a personal benefit, namely an appointment as secretary of the Army or another similarly high-level position in the incoming presidential administration,” said Deputy US Attorney Audrey Strauss. “Calk’s alleged attempt to obtain such an appointment was unsuccessful, and the loans he approved were ultimately downgraded by the bank’s regulator.”
“He curried favor with an influential borrower, exploited his position as CEO of a bank and its holding company, and exercised control over the bank and the borrower’s loans, intentionally turning his back on the many red flags posted along the way,” said William F. Sweeney Jr., FBI assistant director. “His attempt 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.”
According to the indictment, Calk engaged in the scheme between July 2016 and January 2017, prior to Trump taking office. The indictment alleged that Manafort (identified as “the Borrower” in court documents) sought millions of dollars in loans from the Federal Savings Bank of Chicago “in order to terminate or avoid foreclosure proceedings on multiple properties owned by the Borrower and the Borrower’s family.” The indictment also alleged that Calk believed that Manafort “could use his influence with the Presidential Transition Team” to land Calk a senior position in the Trump administration.
Calk used his control over the bank to extend $16 million in loans to Manafort in exchange for Manafort’s “requested assistance in obtaining a high-level position in the presidential administration,” the indictment said. Calk even allegedly provided Manafort with a ranked list of positions he wanted, starting with secretary of the Treasury.
Even as he extended millions in loans to Manafort, Calk was allegedly aware of the former Trump campaign chairman’s history of defaulting on prior mortgages. “Moreover, given the size of the loans, the Borrower’s debt became the single largest lending relationship at the Bank,” the indictment alleged.
Manafort repaid Calk’s largesse by securing him a prestigious position on an economic advisory council affiliated with the Trump campaign, according to the Department of Justice. In December 2016, Manafort allegedly used his influence with the presidential transition team to recommend Calk for a position in the administration. Although not ultimately hired, Calk was formally interviewed for the position of undersecretary of the Army.
Calk has been charged with one count of financial institution bribery in the case. If convicted, he could receive up to 30 years in prison.