The former president of failed Pinehurst Bank in St. Paul was sentenced Friday to three-and-a-half years in prison for misapplying bank funds to cover a customer’s anticipated overdrafts, Minnesota’s U.S. Attorney’s Office announced.

John Markert of Mendota Heights was indicted in June 2011 along with George Wintz, a local business owner and Pinehurst Bank customer. In April, Markert was found guilty of five counts of misapplication of bank funds.

Wintz, meanwhile, was found guilty of two counts of bank fraud and one count of theft from an employee benefit plan, but he was found not guilty of helping Markert misapply funds. Wintz was sentenced Thursday to three-and-a-half years in prison.

A third defendant, Gregory Pederson, was acquitted in April.

Prosecutors accused Wintz of operating a “check-kiting” scheme. Check kiting refers to a process of floating checks between accounts to create the illusion of having a balance from which money can be withdrawn; an individual writes a check for a value greater than his or her account balance at one bank and then writes another check from a different bank to cover the first overdrawn account—essentially taking advantage of the time it takes a check to clear.

According to the U.S. Attorney’s Office, evidence presented during the trial showed that from March 2009 through January 2010, Markert helped arrange five fraudulent loans totaling $1.9 million, which were issued to straw borrowers for the purpose of covering $1.85 million in anticipated overdrafts stemming from Wintz’s bad checks.

Markert allegedly took steps to conceal the fraudulent loans from the bank’s board, but the scheme was uncovered in January 2010 during an independent audit. The bank subsequently fired Markert and declared the loans as losses—which played a role in the bank’s demise, the U.S. Attorney’s Office said. Pinehurst Bank was closed by regulators in May 2010.