A Chicago banker who arranged $16 million in loans for former Trump campaign chairman Paul Manafort was found guilty Tuesday on charges of seeking to trade the loans for positions on the Trump campaign and in the Trump administration.
A jury returned guilty verdicts on two felony counts against former Federal Savings Bank CEO Stephen Calk after a three-week trial in federal court in New York, the U.S. Attorney’s Office there said in a statement.
Jurors deliberated for less than a day before returning the verdicts.
Prosecutors alleged that Calk pushed to approve the loans to Manafort while seeking a post on the Trump campaign’s Economic Advisory Board and sought a series of Cabinet posts and other jobs after Trump’s win in November 2016, all while continuing to urge more lending to the lobbyist and high-flying political consultant whose career imploded soon after Trump took office.
Calk proposed himself as Treasury secretary, Commerce secretary and Defense secretary, and for a long list of ambassadorships, before focusing on secretary of the Army. He was interviewed by a Trump transition “tiger team” at Trump Tower but never landed an administration job.
Calk’s defense argued there was no connection between the loans and Calk’s personal or political ambitions. Calk’s lawyers also said he thought the loans were good deals for his bank and that he was unaware of various falsehoods Manafort told about his finances during the application process.
Defense lawyers also noted that since Calk owned most of the bank, it made little sense for him to extend millions of dollars in loans if he didn’t think they would be repaid.
The trial featured testimony by former Trump White House communications director Anthony Scaramucci, who told jurors he helped Calk get an interview at Manafort’s request but was unaware of the financial relationship between Calk’s bank and Manafort. Scaramucci said he would not have aided Calk if he had known of the loan effort.
Jurors also saw an email Manafort sent to President Donald Trump’s son-in-law and adviser Jared Kushner, urging consideration of Calk for the secretary of the Army post. “On it,” Kushner replied in the email. It’s unclear what action, if any, he took. Kushner was not called as a witness at the trial.
Calk chose not to testify in his own defense.
Calk was charged in 2019 with financial institution bribery and accused of violating his duty to the federally insured bank by seeking a “thing of value” from a prospective borrower. Last year, prosecutors got a grand jury to add another charge of conspiracy to commit the same offense.
Calk faces a maximum possible sentence of 35 years in prison, but he will likely be sentenced under federal guidelines that typically call for much less than the maximum, especially for first-time offenders.
Judge Lorna Schofield set sentencing for Jan. 10. Calk will remain free until then.
Calk’s lead attorney, Paul Schoeman, said an appeal was planned.
“We are very disappointed by the verdict and will be pursuing all available legal remedies, including an appeal,” the defense attorney said via email.
U.S. Attorney Audrey Strauss hailed the jury’s decision and said it should discourage malfeasance at other banks.
“Calk used the federally-insured bank he ran as his personal piggybank to try and buy himself prestige and power,” Strauss said in a statement. “Today’s verdict sends the message that corruption at the highest levels of federally regulated financial institutions will be prosecuted by this Office.”
Strauss called the loans “high-risk,” but whether the bank will actually take a loss on them is unclear. Manafort defaulted on the loans soon after he was indicted in October 2017 on charges of scheming to operate as an unregistered foreign agent in the U.S., money laundering and false statements. Prosecutors later added a series of charges of failing to pay income tax, failing to report dozens of overseas bank accounts, and bank fraud, including in connection with money lent by Calk’s bank. According to the defense, the bank has already recovered about $6 million of the roughly $12 million Manafort owed at the time of his indictment.
By pardoning Manafort after he’d served about two years of a seven-and-a-half year sentence, Trump led the Justice Department to abandon efforts to forfeit a couple of his properties: a brownstone in the Cobble Hill neighborhood of Brooklyn, and a luxurious estate in Bridgehampton, Long Island. Those homes were collateral for Manafort’s loans and are likely to be sold by the bank.
Because of pandemic-related rises in real estate prices, those homes have likely increased in value and may now be worth more than the remaining amount outstanding on Manafort’s loans.