DENVER (AP) – A senior executive of a failed Colorado bank has been sentenced to 30 months in prison for making improper loans to prop up the institution.
Gregory Bell was facing up to 30 years on each of three counts, including bank fraud, and up to 20 years for money laundering at the New Frontier bank.
U.S. District Court Judge Lewis Babcock ordered a hearing on June 12 to determine who will get restitution.
Investigators and prosecutors said the investigation proves that the federal government takes bank fraud seriously.
“Those responsible for bank failures were also ultimately responsible for the weakening of our economy,” U.S. Attorney John Walsh said in a statement after the sentence was announced on Wednesday.
Bell was the chief loan officer at New Frontier, which had $2 billion in assets before lending practices turned it into one of the nation’s most expensive bank failures in 2009, costing the Federal Deposit Insurance Corp. $670 million.
Prosecutors said Bell was responsible for making more than $20 million in loans to borrowers in return for $4.3 million used to purchase New Frontier Bancorp stock. He also was accused of trying to pocket $160,000 in illegally obtained money.
Angry farmers and ranchers demanded help from the federal government after the agricultural bank collapsed, forcing them to renegotiate millions of dollars of loans in less than a month.