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Bank CEO Indicted for Approving Manafort Loans in Exchange for Position in Trump Administration


WASHINGTON, DC - FEBRUARY 28: Paul Manafort, former campaign manager for Donald Trump, exits the E. Barrett Prettyman Federal Courthouse, February 28, 2018 in Washington, DC. This is Manafort’s first court appearance since his longtime deputy Rick Gates pleaded guilty last week in special counsel Robert Mueller’s Russia probe.

Federal prosecutors in the Southern District of New York (SDNY) have charged Federal Savings Bank CEO Stephen M. Calk, 54, with corruptly soliciting a presidential administration position in exchange for approving $16 million in loans to twice-convicted former Trump campaign chairman Paul Manafort.

Audrey Strauss, the Attorney for the United States, Patricia Tarasca, the Special Agent in charge of New York Region for the FDIC Office of Inspector General, and William F. Sweeney Jr., the Assistant Director of the FBI’s New York field office, announced the unsealing of the indictment Thursday morning.

Calk is charged with financial institution bribery, prosecutors say, for “corruptly using his position as the head of a federally insured bank to issue millions of dollars in high-risk loans to a borrower in exchange for a personal benefit: assistance from the borrower in obtaining a senior position with an incoming presidential administration.”

According to the indictment, Calk “sought to leverage his control over the Bank and the loans sought by [Manafort]to his personal advantage.”

“Specifically, CALK offered to, and did, cause the Bank and Holding Company to extend $16 million in loans to [Manafort] in exchange for the [Manafort’s] requested assistance in obtaining a high-level position in the presidential administration,” the indictment continued.

Strauss said that Calk “abused the power entrusted to him as the top official of a federally insured bank by approving millions of dollars in high-risk loans in an effort to secure a personal benefit, namely an appointment as Secretary of the Army or another similarly high-level position in the incoming presidential administration.”

She also noted that his scheme was ultimately fruitless, stating that “Calk’s alleged attempt to obtain such an appointment was unsuccessful, and the loans he approved were ultimately downgraded by the bank’s primary regulator,” before thanking the FBI and FDIC OIG for their “outstanding work” in charging Calk.

“Calk went to great lengths to avoid banking violations in an attempt to secure a senior position in a presidential administration. He curried favor with an influential Borrower, exploited his position as CEO of the Bank and the Holding Company, and exercised control over the Bank and the Borrower’s loans, intentionally turning his back on the many red flags posted along the way,” Sweeney added in a statement.

Law&Crime has previously reported on the emails exchanged between Manafort and Jared Kushner in which the former describes Calk as “an active supporter of [the] campaign since April,” noting his many television appearances in support of Trump’s agenda. Manafort then relayed Calk’s “preference” to be named Secretary of the Army.

The maximum sentence for one count of financial institution bribery is 30 years in prison (it should be noted that this is a maximum not a likelihood). Calk is expected to appear before US Magistrate judge Debra Freeman Thursday afternoon.

[image via Drew Angerer_Getty Images]

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Jerry Lambe is a journalist at Law&Crime. He is a graduate of Georgetown University and New York Law School and previously worked in financial securities compliance and Civil Rights employment law.