MINNEAPOLIS (WCCO) – A former St. Paul bank president received a sentence of more than three years in prison Friday for his involvement in a multimillion-dollar check-kiting scheme that defrauded the bank he presided over, the Justice Department said.
District Judge Ann D. Montgomery sentenced 58-year-old John Markert, of Mendota Heights, to 42 months in prison on five counts of “misapplication of bank funds.” A jury convicted Markert and his co-defendant, 72-year-old George Wintz, Jr., in April.
Markert had been the president of Pinehurst Bank, which fired him after the scheme was uncovered. Pinehurst Bank, however, had to declare Markert’s misapplication of funds as losses, and regulators closed the bank a few months later.
In check-kiting schemes, the schemers withdraw a value greater than the account balance. But to cover the overdraft, the schemers write a phony check from an account at another bank. This results in falsely inflating account values. The schemers then use these phony funds to make purchases and payments.
Trial evidence showed Markert placed a series of five loans to cover up a check-kiting scheme by Wintz, the department said. The loans, which totaled $1.9 million, were placed between March of 2009 and January of 2010.
Another bank, which was not named in court documents, discovered the scheme in January of 2010.
Montgomery sentenced Wintz Thursday to 42 months in prison for bank fraud and for stealing from an employee benefit plan, the department said.