Former Bank CEO Gets 4 Mos., $30K Fine for Fraud
Former Community National Bank CEO William Garfield Sandison was sentenced Friday to four months in prison and was ordered to pay a $30,000 fine for his role in a scheme to defraud other financial institutions.
Sandison, age 67, of Forest Lake, was indicted in April 2009 and pleaded guilty in August 2009 to one count of conspiracy to defraud the United States.
According to the U.S. Attorney's Office in Minnesota, Sandison conspired with others between 2003 and 2007 to execute a scheme to defraud other financial institutions through the financing of Ramsey Town Center-a 320-acre, mixed-use development in Ramsey.
Community National Bank allegedly solicited 20 financial institutions to participate in financing the Ramsey Town Center development. Once the financial institutions agreed to do so, Community National Bank loaned the Ramsey Town Center $35 million in development funds, with an option for another $15 million.
According to the U.S. Attorney's Office, Community National Bank assumed responsibility for administering the loan on behalf of the participating financial institutions.
But Sandison admitted in his plea agreement that he arranged for a $990,000 loan from the Ramsey Town Center development funds without informing the other banks. Later, he arranged for another loan-which totaled $6 million-from the same funds, again failing to notify the other banks.
The fraud scheme resulted in false and misleading information being provided to federal bank examiners from the Office of the Comptroller of Currency, the U.S. Attorney's Office said.
When questioned by federal bank examiners, Sandison claimed that certain expenses were “ordinary and necessary business expenses that relate to bank business,” but some of them were actually for personal use, including $8,500 in landscaping services at his private residence, according to the U.S. Attorney's Office.
Sandison's co-defendants-his son Ross William Sandison and former coworker Curtis Alan Martinson-were sentenced earlier this year for their roles in the scheme.
Ross Sandison, who served as Community National Bank's vice president, was sentenced to three months in prison and was ordered to pay a $30,000 fine on one count of conspiracy. Martinson, who served as Community National Bank's president, was sentenced to two years of probation and ordered to pay a $20,000 fine on one count of conspiracy to commit bank fraud.