Former Anchor Bancorp Official Faces Fraud Charges

The watchdog in charge of monitoring TARP recipients on Tuesday announced criminal charges against a former official of Anchor Bancorp Wisconsin Inc. for allegedly orchestrating a fraudulent real-estate deal.

David Weimert, 63, was indicted in the U.S. District Court in Madison, Wis., on six counts of wire fraud relating to a real-estate development transaction he worked on as senior vice president of lending administration and as a president of an Anchor subsidiary that invested in real-estate developments. The charges are the result of a probe conducted by the Federal Bureau of Investigation and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Reached Tuesday, Mr. Weimert’s attorney, Stephen Meyer, said his client didn’t commit a crime and will plead not guilty.

“I don’t think what’s been alleged is a crime. The bottom line is that my client worked really hard to put together a successful sale of property during a time period when the economy was crashing, and the bank was directing him to liquidate the property in question,” Mr. Meyer said. “The end result was that it converted one of Anchor Bank’s nonperforming assets, a negative on the books, into a profitable performing loan, a positive for the bank.”

Mr. Weimert faces a maximum penalty of 30 years’ imprisonment on each count of wire fraud.

According to SIGTARP, Mr. Weimert used his position at Anchor to mislead his superiors into believing a sale of the Anchor subsidiary’s share of a Texas industrial park was contingent on him purchasing a minority interest in the park. The Anchor unit agreed to the deal, giving Mr. Weimert both a minority stake in the development as well as more than $300,000 in commission fees.

The indictment covers actions that took place between December 2008 and April 2009, and Anchor received $110 million in TARP funds in January 2009. The bank-holding company sought Chapter 11 protection last August and won court approval of its bankruptcy-exit plan the following month. TARP lost the bulk of its investment—$104 million—as a result of the restructuring, which saw Anchor pay TARP about $6 million worth of its stock.

Separately, Anchor and a former executive in August settled fraud charges brought by federal securities regulators, who alleged that the executive manipulated financial data in order to keep from correcting earnings that Anchor had already released to shareholders.

Out of bankruptcy, Anchor is now considering going public, the Milwaukee Journal Sentinel reported earlier this month.

Write to Jacqueline Palank at [email protected]. Follow her on Twitter at @PalankJ.