Solving the Post-Close Challenge with Intelligent Automation

Join our upcoming webinar as SoftWorks AI CEO and Avanze CEO explore the advances in tech that allow for greater levels of automation and cost reduction, especially in support of post-close and pre-fund review.

Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

The 100-years-war over real estate commissions

HousingWire plunges down the rabbit hole of residential real estate commissions, uncovering the past, present and future of this wholly unique part of the economy.

How borrower education can make housing more attainable

The current housing market is making it difficult for prospective buyers to afford a home. Housing professionals need to find ways to better meet buyer needs.

Mortgage

Federal Savings Bank CEO indicted for approving Manafort mortgages in attempt to land top job in Trump administration

Stephen Calk accused scheming with Paul Manafort in quid-pro-quo deal

Stephen Calk, the CEO and founder of the Federal Savings Bank of Chicago, was indicted Thursday for approving $16 million in mortgage loans for Paul Manafort in exchange for the former Trump campaign chairman’s help on landing a senior post with the administration.

According to the Department of Justice, Calk used his position as the head of a federally insured bank to issue millions in high-risk loans in a quid-pro-quo deal from which he would personally benefit.

In 2017, news of a possible scheme first came to light when it was revealed that the Federal Savings Bank lent Manafort millions of dollars, and a year later, Department of Justice special counsel Robert Mueller was said to be looking into the loan.

Now, official charges have been filed, alleging that Manafort approached Calk in late 2016 looking to borrow millions of dollars from the bank, which he urgently needed to stop or avoid foreclosure proceedings on multiple properties.

The DOJ alleges that while Manafort’s loans were pending, Calk provided him with a ranked list of the positions he wanted within the Trump administration, leading with secretary of the Department of the Treasury, and followed by deputy secretary of the Treasury, secretary of the Department of Commerce, secretary of the Department of Defense, and 19 ambassadorships similarly ranked, starting with the United Kingdom, France, Germany, and Italy.

The charges also state that Calk was aware of Manafort’s history of default and circumvented bank rules that would have inevitably denied the loan by acquiring a portion of the loan amount through the bank’s holding company, which he controlled as chairman and CEO.

In exchange, Manafort appointed Calk to an advisory committee for the Trump campaign and, after Trump was elected, recommended Calk for the job of under secretary of the Army, which he ultimately did not get.

The DOJ goes on to state that the Office of the Comptroller of the Currency flagged the loans made to Manafort as substandard and questioned the bank about its inappropriate classification, at which time Calk lied to regulators about his relationship with Manafort to cover his tracks.

When Manafort was indicted in October 2017, he stopped making payments on his loans, forcing the bank to foreclose on the cash collateral securing the loans – ultimately suffering a loss that totaled more than $12 million.

William F. Sweeney Jr., assistant director of the Federal Bureau of Investigation, said Calk went to great lengths to avoid banking violations in order to land a senior government position.

“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 said. “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.”  

Calk is charged one count of financial institution bribery and faces up to 30 years in prison.

The Federal Savings Bank has removed his name on the leadership page of its website, listing instead John Calk as vice chairman and CEO. 

Most Popular Articles

Biden’s $15K first-time homebuyer tax credit now a bill

President Joe Biden called for a $15,000 tax credit for first-time homebuyers, and Congress has answered his call with a bill.

Apr 26, 2021 By

Latest Articles

What a dismal jobs report means for the housing market

April’s U.S. jobs report on Friday was dismal at just 266,000 new jobs, but economists say they’re not worried about the housing or mortgage market. HW+ Premium Content

May 07, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please