Shaun Hayes, a banker, pleads guilty to federal fraud charges

Shaun Hayes, a banker, pleads guilty to federal fraud charges

Shaun Hayes, a banker, pleads guilty to federal fraud charges
Shaun Hayes, a banker, pleads guilty to federal fraud charges

Banker Shaun Hayes pleads guilty to federal fraud charges in US Federal Court

St. Louis, MO/January 4, 2018 (STL.News) – Shaun R. Hayes, 58, of Frontenac, pled guilty yesterday to participating in a scheme to defraud Excel Bank and to profit from illegal insider loans. He appeared before United States District Judge Audrey G. Fleissig. Sentencing is scheduled for April 13, 2018.

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. 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. Hayes admitted that he helped set up a loan at Excel Bank to a straw party 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 show that Hayes assisted in causing Excel Bank to make millions of dollars in loans to straw parties in order to cover the delinquent and substandard loans of Eighteen Investments at other banks. According to the charges, Excel Bank lost substantial amounts on these loans.

Hayes also admitted that he and Litz shared in the proceeds of another insider loan at Excel Bank in which Hayes’s and Litz’s interests were concealed. In April, 2009, they each received approximately $300,000.00 from the proceeds of a loan made 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.

“Shaun Hayes exploited Excel Bank when he knowingly issued millions of dollars in bad loans,” said Special Agent in Charge Richard Quinn of the FBI St. Louis Division. “When banks fail, we all pay.”

Bank regulators closed Excel Bank in October, 2012, and Simmons Bank succeeded it.

Hayes pled guilty to one count of bank fraud and one count of misapplication of Excel Bank funds, both federal felonies. The maximum punishment for each count is 30 years in prison and a fine of $1,000,000.00.

Litz is scheduled to go to trial in January 22, 2017 on the superseding indictment charging both him and Hayes. As is always the case, charges do not constitute proof of guilt and every defendant is presumed to be innocent unless and until proven guilty.

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.

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SOURCE: news provided by JUSTICE.Gov on January 3, 2018, published on STL.News by St. Louis Media, LLC (MS)

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