NEW YORK -- A banker who prosecutors say tried to buy himself a senior post in President Donald Trump's administration by making risky loans to former Trump campaign chairman Paul Manafort pleaded innocent Thursday to a financial institution bribery charge.
Stephen Calk, 54, was released on $5 million bond after making a brief appearance in Manhattan federal court.
Calk, who lives in Chicago where Federal Savings Bank is based, was told by Magistrate Judge Debra Freeman to have no contact with bank employees except for his brother until prosecutors next week submit a list of individuals with whom he's not to communicate.
The small bank where Calk was CEO when the alleged scheme took place said in a statement that Calk's involvement with the bank has been severed and that he is on a leave of absence.
In a statement, Calk attorney Jeremy Margolis said Calk will be exonerated on the "baseless isolated charge." He called the arrest a "travesty."
"The Special Counsel and a federal judge have determined that The Federal Savings Bank was a victim of Mr. Manafort's crimes," the bank said in a statement, adding it isn't accused of "any wrongdoing."
Federal prosecutors described the charge in a release, saying Calk abused his bank position by approving $16 million in high-risk loans that were ultimately downgraded by the bank's primary regulator.
William Sweeney, head of New York's FBI office, said Calk "went to great lengths to avoid banking violations in an attempt to secure a senior position in a presidential administration."
"His attempt at petitioning for political favors was unsuccessful in more ways than one -- he didn't get the job he wanted, and he compromised the one he had," Sweeney added.
If convicted, he could face up to 30 years in prison.
Calk began in July 2016 to exploit his position as head of the bank and its holding company, knowing Manafort urgently needed loans to avoid foreclosure proceedings on multiple properties he and his family owned, according to prosecutors.
Prosecutors said while Manafort's loans were pending approval, Calk gave Manafort a ranked list of government positions he wanted, starting withstreasury secretary, followed by deputy treasury secretary, commerce secretary and defense secretary, as well as 19 ambassadorships similarly ranked.
Manafort lobbied Trump's son-in-law, Jared Kushner, to consider Calk for secretary of the Army, according to emails from the weeks leading up to the 2016 election shown to jurors at Manafort's tax-evasion and bank-fraud trial last year.
Testifying under an immunity agreement, James Brennan, who was a vice president of the bank at the time, said Calk overruled bank executives who rejected one of Manafort's loans for "inconsistencies."
The loan "closed because Mr. Calk wanted it to close," Brennan said.
Information for this article was contributed by Stephen Braun of The Associated Press.
A Section on 05/24/2019