HJ/ED

Aug. 14, 2006

Aanenson pleads guilty to fraud

By Lynda Jensen
Editor

A former executive of a Cokato bank pleaded guilty to two counts related to fraud in federal court Thursday, according to the US Attorney’s Office.

Bob Aanenson, 52, of Dassel pleaded guilty to bank fraud and making a false entry in a bank report, according to Assistant US Attorney Hank Shea, who prosecuted the case.

The case is in connection with a $65,000 loan Aanenson approved to the business Moldserv in September of 2003.

As in the past, calls to Aanenson’s attorney, Joe Friedberg, were not returned as of press time.

Mandatory prison time

For the most part, bank fraud carries an automatic prison sentence – although what his sentence will be is up to the judge, Shea said.

“In the sense that the statute does not provide for probation, there is a presumption of imprisonment,” Shea said.

Aanenson faces a maximum potential penalty of 30 years in federal prison and a $1 million fine on each of these charges.

The sentence that the US Attorney’s Office plans to propose will be between 21 and 27 months of prison time, Shea said. There is the likelihood that Aanenson’s attorney will ask for 12 to 18 months, Shea said. “These are recommendations only,” he noted.

Aanenson’s date for sentencing has not been set, however Shea estimated it would be between two to three months from now.

For now, a pre-sentencing investigation has been ordered, which is common procedure. This will take between six to eight weeks, he said.

“This case is a good example of state and federal cooperation,” Shea said.

In particular, the deputy commissioner of the Department of Commerce, Kevin Murphy, and his staff, were a critical part of the case, he said.

“I would like to commend the Department of Commerce (where the case originated), the FDIC, and the FBI,” Shea said.

Working together, these entities brought speedy justice to this case, he said.

Aanenson was formerly president and director of the State Bank of Cokato.

How it came about

The loan, made at the State Bank of Cokato in 2003, was for the purpose of providing Moldserv with working capital.

Instead, the US Attorney’s office says that the loan was transferred to Plastic Solutions.

Three days after the loan was granted, the money was moved to an account for Plastic Solutions, with $47,802 being used to cover a checking account that had been overdrawn for months.

The remainder was used for unauthorized purposes, said Karen Bailey of the US Attorney’s Office.

No payments were ever made on the loan, and the bank wrote off the debt in October 2004 as uncollectable, she said.

In July 2004, Aanenson directed a bank employee to credit Plastic Solutions’ checking account with $92,669. At that time, the account was almost $150,000 overdrawn. Aanenson also directed the same person to credit Moldserv’s checking account with $10,242, which was the amount the account was overdrawn.

Aanenson offset these false transactions by having the bank’s prepaid expense account debited by $100,000 and the account for overdraft charges debited by $2,911.

As a result, the bank’s quarterly report to the Federal Deposit Insurance Corporation, filed in October 2004, was inaccurate, in that it failed to disclose a substantial loss.


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