DENVER - Dale E. Mitchell, once a prominent Oklahoma banker, received $141,000 in return for extending a $2.3 million loan to a Colorado banker by the now-defunct Citizens National Bank, federal prosecutors in Denver claim.
The allegation is contained in criminal charges filed this week in Denver against Stanley G. Miles II. Mitchell has not been charged.
Miles is former owner of a suburban Denver bank. The charge is filed under a federal bank bribery law.
The charge filed this week against Miles says he "corruptly gave" a $141,000 loan to Mitchell on Nov. 6, 1985. Had he not made the loan to Mitchell, Citizens Bank would not have granted an extension on the $2.3 million loan, the charge says.
The prosecutor overseeing the case said the law applies to people who receive illegal payments, as well as those who make such payments. He would not say whether Mitchell violated the law.
The charge does not specify whether the loan to Mitchell was ever repaid.
The U.S. attorney's office in Denver, in a written press statement, said more people are expected to be charged "in the near future" as the investigation continues. Assistant U.S. Attorney William R. Lucero would not say whether Mitchell is among those who will be charged.
"I don't mean to imply there's a case against Mr. Mitchell here, but the statute (against payments to influence bank loans) works both ways," Lucero said. "There may be complications for others, but we've been focusing on the other end of the deal. " Lucero would not say whether there may be a case against Mitchell in Oklahoma where, prosecutors allege, he received an illegal payment. A federal grand jury in Oklahoma City has been investigating Mitchell's activities. Timothy A. Baker, one of Mitchell's banking associates, was acquitted last year of federal bank fraud charges.
Mitchell could not be reached for comment.
Citizens was declared insolvent in 1986. Mitchell, the bank's chairman and chief executive officer, and Baker, who was vice chairman of the board of directors, agreed to be banned from banking after the U.S. Comptroller of the Currency said the two arranged loans that were concealed from the bank's board and officers.
Lucero said the extension may have been sought because the Colorado bank apparently did not repay the loan to the Oklahoma City bank on time.
The loan from the Oklahoma City bank was used to capitalize the suburban Denver bank, Columbine Valley Bank and Trust, which Miles bought, Lucero said.
In addition to the bank bribery charge, Miles also was charged Tuesday with conspiracy to commit bank fraud. The bribery charge relates to the $141,000 payment to Mitchell. The fraud charge concerns activities not identified as being related to Mitchell.
Lucero said he does not know whether the $2.3 million loan contributed to the failure of Citizens , but described it as "a bad loan. " Columbine Valley Bank of Littleton, Colo., also failed.
The transaction between Miles, who now lives in Del Mar, Calif., and Mitchell was investigated by the FBI, court documents said.
The fraud charge alleges Miles conspired to defraud First Continental Bank of Rockrimmon in Colorado Springs of $507,000 while he was an owner and director of that bank. That bank also failed, the U.S. attorney's office said.
Miles came to Denver from California and in the 1980s became a developer of apartment complexes and office buildings, according to the Rocky Mountain News, a Denver newspaper. It reported that part of Miles' business activities was a $20 million purchase, with two partners, in 1985 of a large Denver realty company which later filed for bankruptcy.
Staff Writer Ed Godfrey contributed to this report. BIOG: NAME:Archive ID: 511041