FARGO (AP) - A former North Dakota bank loan officer accused of helping companies obtain millions of dollars in bogus loans must serve more than a year in prison and pay back nearly $2.8 million, a federal judge ruled Monday.
Prosecutors said Howard Palmer lied about the purpose of various loan applications and the status of some of the borrowers when he was vice president for the Minot branch of American State Bank of Trust of Dickinson in 2005.
Palmer, who was originally charged with 22 counts, pleaded guilty in December to one count of bank fraud and one count of false entry in bank records.
The largest loan in question was for $2.5 million loan to a Florida company involved in the sale of automobiles and automobile parts. Palmer allegedly lied to a loan committee when he said a woman who was president of the company, Pure Class, Inc., had worked with a developer on a large retail project and was married to the developer's son.
Defense attorney Ryan Sandberg did not immediately respond to a request for comment, but said in a sentencing document that his client did not benefit from the crime "other than to obtain satisfaction from borrowers and lenders" when the loans were completed. Sandberg asked for a sentence of house arrest and supervised release.
"Howard's case is very different from the traditional white-collar crimes, in that Howard never obtained these loans on behalf of himself, nor did he receive any money to obtain these loans on behalf of a particular borrower," Sandberg said.
Prosecutors said that while the investigation did not find any payments or kickbacks to Palmer, the defendant was rewarded for his loan portfolio size with salary and promotions. The government asked for a sentence of 34 months in prison.
"The defendant's conduct had a significant impact on a number of individuals in this case and requires consequences," Assistant U.S. Attorney Brandi Sasse Russell said in a sentencing memorandum.
U.S. District Judge Daniel Hovland sentenced Palmer to 15 months in prison and ordered restitution of $2,781,392.