- Ex-CEO bet badly on risky Las Vegas real estate, U.S. says
- Lundstrom allegedly concealed more than $100 million losses
The former chief executive officer of Lincoln, Nebraska-based TierOne Bank was convicted of concealing more than $100 million in losses on loans, federal prosecutors said.
A jury found Gilbert Lundstrom, 74, guilty Friday of misleading regulators and defrauding shareholders in a conspiracy to hide the bank’s problems as losses mounted on its loan portfolio, the U.S. Justice Department said in a statement. Following a two-week trial, jurors returned a guilty verdict on 12 of 13 counts, including wire fraud, securities fraud and falsifying bank entries, the government said.
Prosecutors said evidence at trial showed Lundstrom was the architect of an aggressive strategy to expand the bank’s portfolio beyond traditional lending in its home state to riskier areas like commercial real estate in Las Vegas. After the bank was hit with massive losses, Lundstrom and other TierOne officers provided inflated figures to the U.S. Securities and Exchange Commission and Office of Thrift Supervision, according to the statement.
Carrie DeLange, a lawyer for Lundstrom, didn’t immediately respond to e-mail and voicemail messages seeking comment on the conviction.
TierOne was closed by U.S. regulators in June 2010, and holding company TierOne Corp. filed for bankruptcy three weeks later. The shut-down cost the Federal Deposit Insurance Corp. $298 million.
The bank’s former chief operating officer, James Laphen, and its former chief credit officer, Don Langford, pleaded guilty in the scheme last year.
The case is U.S. v. Lundstrom, 14-cr-03136, U.S. District Court, District of Nebraska (Lincoln).