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Southern Minnesota banker pleads guilty to tax charges

November 04, 2008

Update, 5/14/09: 30 months.

A former bank president from LeRoy, Minnesota, just over the border from Iowa, has pleaded guilty to tax and fraud charges from plundering his bank. From Startribune.com:

Gerald Alan Payne, 53, of LeRoy, pleaded guilty last week in Minneapolis to bank fraud and tax evasion while serving as president and CEO of First State Bank Minnesota.

According to Payne's plea agreement, from January 2003 through June 2007, he misappropriated funds by stealing from customer bank accounts, charging personal expenditures on the bank's credit cards and cashing checks written to the bank and other parties while retaining the proceeds.

Also, from January 2003 through April 2008, Payne willfully attempted to evade payment of taxes for tax years 2003-2007. The resulting tax loss to the federal government is more than $200,000.

The bank fraud count has a maximum 30-year sentence.

Insider theft from a bank is a crime that is about 100% certain to be detected, between state and federal examiners, outside accountants, and internal balances. It takes a sad combination of bad morals and bad judgment.

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