Federal prosecutors on Thursday unsealed criminal charges against Federal Savings Bank CEO Stephen Calk, accusing him of corruptly approving high-risk loans to U.S. President Donald Trump’s former campaign chair, Paul Manafort, in exchange for trying to secure a top job in the Trump administration.
The indictment against Calk was issued in New York. It doesn’t name Manafort directly, but Calk’s name repeatedly came up during Manafort’s 2018 financial fraud trial in Virginia in which prosecutors said Calk and Manafort engaged in a scheme to exchange the $16 million US in loan approvals for an administration post.
Calk, 54, faces one count of financial institution bribery, which carries a maximum prison term of 30 years.
Jeremy Margolis, Calk’s lawyer, said his client would fight the charges, which he called “a travesty.” Calk is scheduled to appear before a federal judge in New York City later on Thursday.
“Mr. Calk has done nothing wrong and will be exonerated at trial of the baseless isolated charge brought against him,” Margolis said in a statement.
Federal Savings Bank said in a statement it is a victim of bank fraud perpetrated by Manafort, and that Calk “has been on a complete leave of absence and has no control over or involvement with the bank.” The bank said it is “not a party to the federal criminal case” and described Calk as its “former chairman.”
Calk’s brother, John Calk, is currently serving as Federal Savings Bank’s CEO, according to the bank.
Calk provided Manafort with a ranked wish list of government jobs that he wanted, starting with treasury secretary and followed by other top jobs in the Treasury, Commerce and Defence Departments, prosecutors said. Federal Savings Bank is based in Chicago.
Manafort was one of the first people in Trump’s inner circle to face charges brought by special counsel Robert Mueller as part of his now-completed investigation into Russian interference in the 2016 U.S. election and Trump campaign contacts with Moscow.
Manafort was convicted of bank and tax fraud in the Virginia trial, and pleaded guilty to other charges in Washington. He is now serving a 7½-year sentence in a federal prison in Pennsylvania.
Recommended by Manafort to Kushner
Evidence at the trial included a November 2016 email sent by Manafort to Jared Kushner, Trump’s son-in-law, after Trump won the presidential election. In the email, Manafort recommended three candidates for administration posts, including Calk.
Kushner responded within minutes to Manafort’s recommendations by email: “On it!”
The prospect of Calk facing charges emerged in a transcript of a bench discussion during the Manafort trial.
“Mr. Calk is a co-conspirator,” Greg Andres, a prosecutor on Mueller’s team, said during a discussion with the judge at the bench, according to a transcript of the discussion. “And he participated in a conspiracy to defraud the bank.”
“There was an agreement between Mr. Manafort and Mr. Calk to have the loans approved,” Andres said. “They were approved and, in turn, Mr. Manafort proposed Mr. Calk for certain positions within the administration.”
Calk appeared on Fox News and Fox Business News several times in 2016, billed as an economic adviser to Trump.
He reportedly did secure an interview during the Trump administration transition for undersecretary of the army, but was not chosen.
Bank CEO Stephen Calk charged with corruptly soliciting a presidential administration position in exchange for approving $16 million in loans <a href=”https://t.co/AdK8DfKlad”>https://t.co/AdK8DfKlad</a>
The exchanges between Manafort and Calk caught the attention of House Democrats who sat on that body’s financial services committee in April 2018.
“Although Mr. Calk ultimately was not given a position … reports that he was being considered for a high-level and highly sensitive national security position within the Trump administration as part of a quid pro quo with Mr. Manafort raise serious concerns that, completely apart from special counsel Robert Mueller’s investigation, warrant scrutiny by our Committee,” Democrats Stephen Lynch and Maxine Waters wrote at the time.