ONE of the defendants indicted for conspiracy to defraud Bank of Saipan entered a guilty plea on Friday.
During a hearing in the U.S. District Court, Michael T. Wilson pleaded guilty to the charges of conspiracy to commit wire fraud, unlawful monetary transactions in criminally derived property, securities fraud and making false statements.
The charges carry a total maximum sentence of 30 years imprisonment, 12 years supervised release, a maximum fine of more than $1 million, and a mandatory special assessment fee of $100.
Judge Alex R. Munson ordered the U.S. Probation Office to conduct a pre-sentence investigation.
Munson set the sentencing for Aug. 13 at 9 a.m.
Wilson was arrested by the Federal Bureau of Investigation in Texas and was flown to Saipan. He is out on bail.
Under the plea agreement, Wilson agreed to make restitution to Bank of Saipan in the amount of $5 million plus interest.
The defendant will also assign to the bank all of his right, title and interest in Sweven Systems LLC, Sweven Group LLC, FFS Transaction Corp., Finity Corp., Fi-Scrip Corp. and a 2002 Dodge Ram 1500 truck.
The parties agreed that Wilson will disclose to the FBI and U.S. government his activities concerning the bank.
According to court papers filed by Assistant U.S. Attorney Patrick J. Smith, Wilson controlled Sweven Systems and Sweven Group, two separate limited liability corporations organized in Texas.
In Aug. 2001, Wilson and the other defendants, Bert Montgomery and DuSean Berkich, together with others known and unknown, fraudulently sought to obtain control of Bank of Saipan through Montgomery’s purchase of the majority of the bank’s common stock.
Upon gaining control of the bank, Montgomery, Berkich and others, with the assistance of then chief executive officer and chairman of the board of directors, Tomas B. Aldan, planned to and did obtain the bank’s money and property for themselves and others, including Wilson, court papers said.
Bank of Saipan made fraudulent loans, including $5 million to Sweven Systems, and a $260,000 loan to Montgomery, court papers said.
In Oct. 2001, Montgomery, Berkich and Wilson presented to Aldan and certain employees of the bank a loan proposal for Sweven Systems.
Under the proposal, Bank of Saipan would loan Sweven Systems $5 million, purportedly for the purpose of its acquisition of two additional companies to expand its existing credit card processing business.
Neither the loan proposal, nor the related business agreement, was ever presented to or approved by the bank’s board of directors.
In Nov. 2001, Montgomery, Berkich and Wilson, urged Aldan and certain other employees of the bank to fund $500,000 of the Sweven Systems loan for the purpose of enabling Sweven Systems to go forward with its acquisition of two credit card processing companies.
To induce Bank of Saipan to make the $500,000 loan, Montgomery, Berkich and Wilson falsely represented that the loan would be secured by $600,000 in cash owned and controlled by Sweven Systems on deposit at another credit card processing company.
While Aldan had not initially authorized the disbursement, he later ratified it without first obtaining the proper documentation. Aldan concealed the loan from the board, court papers said.
On Nov. 8, Bank of Saipan wired $500,000 to Sweven Systems’ bank in Plano, Texas. Wilson fraudulently caused Sweven Systems to disburse the majority of these funds to pay for a variety of expenses unrelated to the acquisition of credit card processing companies.
On Dec. 26, 2001, Wilson caused Sweven Group—rather than Sweven Systems, the borrower of the loans and the entity obligated to repay Bank of Saipan—to enter into an transaction in which Sweven Group acquired an indirect interest in two credit card processing companies.
In Jan. 2002, Montgomery, Berkich , Wilson and others urged Aldan and certain officers of the bank to loan an additional $4.5 million to Sweven Systems so that it could complete its acquisition of two credit card processing companies.
Aldan then approved the additional $4.5 million loan to Sweven Systems and caused the funds to be transferred by wire from Bank of Saipan to the escrow account of Sweven System’s attorneys in Texas.
Last Jan. 14, Wilson wire transferred from North Dallas Bank & Trust Co. in Texas the amounts of $150,000; $2,608,805; and $945,890, court papers said.
From May to Sept. 2001, Wilson and others in Texas made false and fraudulent representations and misleading omissions concerning the assets of Alco Oil & Gas, an entity that purportedly had been acquired by Original Media, Inc., the common stock of which was traded on the over-the-counter market.
Last May 6 and 7, Wilson in response to questioning by agents of the FBI and the Internal Revenue Service, and representatives of the U.S. Attorney’s Office for the Districts of Guam and the CNMI, falsely denied engaging in certain fraudulent activity unrelated to Bank of Saipan, including the securities fraud scheme.
Prosecutors told reporters on Friday that Berkich was already arrested by the FBI and could be transferred to Saipan after an identification hearing in California.
