Stephen Calk, founder and chief executive officer of Chicago Bancorp, stands outside the media filing center ahead of the first U.S. presidential debate at Hofstra University in Hempstead, New York, U.S., on Monday, Sept. 26, 2016. Trump and Hillary Clinton are locked in a tied two-way race for the presidency as they head into one of the most highly anticipated debates in modern politics. Photographer: Andrew Harrer/Bloomberg Stephen Calk, founder and chief executive officer of Chicago Bancorp. Photo: Andrew Harrer/Bloomberg

Stephen Calk, the CEO of Federal Savings Bank of Chicago and a economic adviser to Donald Trump during his 2016 presidential campaign, was charged with institutional bribery by federal authorities in Manhattan on Thursday, for allegedly extending $16 million in loans to former Trump campaign chairman Paul Manafort.

In exchange for the loans, Calk allegedly asked Manafort for assistance securing a high-ranking position, such as secretary of the Army, in the new administration.

In a statement, FBI Assistant Director William Sweeney Jr. said Calk went to “great lengths to avoid banking violations” as part of the alleged scheme.

“His attempt at petitioning for political favors was unsuccessful in more ways than one—he didn’t get the job he wanted, and he compromised the one he had,” Sweeney said.

Calk’s name became connected to the broader set of investigations into Trump associates during Manafort’s first trial, in which the former Trump campaign chairman was charged with multiple crimes in connection to the $16 million loan from Calk’s bank. Ultimately, jurors failed to deliver a guilty verdict on those charges.

According to prosecutors in Manhattan, beginning in July 2016, two months after being promoted to Trump campaign chairman and chief strategist, Manafort approached Calk’s bank for loans to help him avoid foreclosure on multiple properties owned by the Manafort family.

Prosecutors claim Calk saw in Manafort an opportunity to gain traction with the Trump campaign and, later, in the Trump administration. At Calk’s direction, the bank began extending Manafort a line of credit that started at $5.7 million and was increased over time. At one point, in October 2016, Manafort allegedly emailed Calk to ask for an additional $1 million in credit on the proposed loan that was then up to $8.2 million.

“I look to your cleverness on how to manage the underwriting,” Manafort allegedly wrote Calk in an email.

The bank CEO came through: the proposed loan to Manafort was increased to $9.2 million, prosecutors said.

Even as Calk was increasing Manafort’s line of credit, bank officials were raising concerns over Manafort’s creditworthiness. Prosecutors claim bank personnel first learned that the property in Los Angeles Manafort allegedly sought the funds for was itself in default and in the process of being foreclosed on. An underwriter at the bank memorialized concerns about Manafort, including the inability to verify his stated income and a $300,000 credit card delinquency.

Eventually these red flags were too much for even Calk to overcome at Federal Savings Bank of Chicago, which, through its president, refused to allow the loan to proceed. That didn’t dampen Calk’s efforts to help Manafort. The loan officer, with Calk’s backing, sought the backing from a different financial institution to approve a restructured loan for the president’s former campaign chairman.

After Trump’s election in 2016, Calk was able to handle the situation on his own, and his bank approved Manafort’s loan of $9.5 million. Shortly after, Calk began pushing Manafort on possible roles he could play in the new administration. According to prosecutors, Calk sent Manafort a list of possible roles, including Secretary of the Treasury, Commerce, Army, or Defense. He also flagged 19 ambassadorships he was interested in, including the United Kingdom, France, Germany and Italy.

After Trump’s election, while he was pursuing positions inside the administration, Calk pushed for an additional $6.5 million loan for Manafort, which he was in need of to keep a property in Brooklyn from also being foreclosed on. At the same time, Manafort flagged Calk’s name as a recommendation for Secretary of the Army to transition team officials.

Calk was not offered a position in the Trump administration.

Calk is being represented by Loeb & Loeb white-collar criminal defense and investigations co-chairman Jeremy Margolis. In a statement, Margolis pushed back on the government’s narrative, claiming that the loans provided to Manafort were “good loans,” and that providing them to Trump’s former campaign chairman “had nothing whatsoever to do with Mr. Calk’s desire to serve” in the administration.

“Mr. Calk has done nothing wrong and will be exonerated at trial of the baseless isolated charge brought against him,” Margolis said. “Those loans simply were not a bribe for anything. ”

In an attached statement, the Federal Savings Bank noted that there was no suggestion of wrongdoing by the bank itself in the charges against Calk. Both Margolis’ statement regarding his client and the statement provided by the bank itself stated that both former Special Counsel Robert Mueller’s investigation and the federal judge overseeing Manafort’s criminal trial determined the bank was Manafort’s victim.

U.S. Attorney Geoffrey Berman of the Southern District of New York is recused from the prosecution, which is being overseen by senior counsel Audrey Strauss.

Following a trial in Virginia and a guilty plea in Washington, D.C., Manafort is set to serve more than seven years in federal prison.


DC Judge Dismisses ‘Plea for Leniency’ While Imposing Manafort Sentence

Paul Manafort Gets 47 Months, but Second Sentencing Awaits

Now Paul Manafort’s Lawyers Get Their Turn in Virginia Federal Court