William Glasgow, 72, Town and Country, Missouri, James Crews, 56, Wentzville, Missouri, and Michael Hilbert, 62, St. Charles, Missouri, surrendered on January 10, 2014, to authorities on two separate indictments alleging bank fraud against TARP recipient Excel Bank.
Glasgow was indicted by a federal grand jury on two felony counts of bank fraud. In a separate, unrelated indictment, Crews and Hilbert were indicted jointly on two felony counts each of bank fraud.
The indictments were returned December 11, 2013, but remained sealed until the defendants appeared in federal court for arraignment on October 10, 2014, in St. Louis, Missouri.
According to the indictments, Glasgow owned dozens of rental properties as part of his real estate business, Glasgow Realty, and did business with Excel Bank. The indictment states that Glasgow had two loans on his rental properties which he received by falsifying documentation. Specifically, the indictment alleges that he provided rent rolls that overstated the amount of rent collected from properties and falsely represented that properties were rented when they were vacant.
In a separate, unrelated indictment, Crews and Hilbert are alleged to have engaged in the real estate business, doing business through various entities including Crews Corporation, Hillcrew Properties, Merz Properties, Eagle Group, and Marathon RE. They owned dozens of rental properties in the St. Louis area and are alleged to have defrauded Excel Bank by submitting numerous construction draw requests for hundreds of thousands of dollars in escrow funds set aside for improvements to those properties. Properties included 10133 Crown Point, St. Louis, Missouri (indictment alleges a false construction draw was submitted for A/C when no air conditioning work was done on the property), 5333 Jennings Stations Road, Jennings, Missouri (indictment alleges a false construction draw was submitted to add an additional bedroom and for a water heater), 10045 Dorothy Avenue, St. Louis, Missouri (indictment alleges a false construction draw request for replacing a retaining wall), 6239 Jefferson Avenue, Berkeley, Missouri (indictment alleges false construction draw request to purchase A/C units and furnace and perform deck repairs.)
In May 2009, Investors Financial Corporation of Pettis County, Inc., the parent company of Excel Bank, received $4 million in federal taxpayer funds through the U.S. Department of the Treasury Troubled Asset Relief Program (TARP). On October, 19, 2012, Excel Bank failed and was closed by state and federal regulators. As a result of the bank’s failure, the $4 million TARP investment was lost, in addition to more than $900,000 in missed dividend and interest payments owed by the bank as a result of holding TARP funds.
Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Richard Callahan, United States Attorney for the Eastern District of Missouri, announced the charges.
“Glasgow, Crews, and Hilbert are charged with defrauding TARP recipient Excel Bank,” said Christy Romero. “When Excel Bank failed, taxpayers lost their entire $4 million TARP investment in the bank and more than $900,000 in past-due dividends. Defrauding a TARP bank is defrauding the federal taxpayers who funded the TARP bailout. SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud that hurt taxpayers’ TARP investments, and perpetrators will be held accountable and brought to justice.”
This case was investigated SIGTARP and the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus is prosecuting the case.