LongmontFYI Logo
LongmontFYI Home
 
Business Logo


LongmontFYI
Business Archive

 

 
back to archive

7/3/2003

Former banker’s trial likely to be delayed

By B.J. Plasket
The Daily Times-Call

DENVER — A federal judge has granted a $100,000 bond for the former owner of the failed BestBank of Boulder, but the trial of Edward P. Mattar and his four co-defendants is likely to be delayed for several months.

Mattar, who has been in custody since his arrest at Los Angeles International Airport a month ago, was earlier denied bond because he refused to answer questions from federal pre-trial officers.

Many of those questions involved assets and their location, but Mattar — facing the possible government seizure of up to $100 million — declined to answer the questions. His refusal to list his assets also kept him from hiring a lawyer or having one appointed.

After Mattar answered pre-trial officers’ questions, a federal magistrate on Tuesday approved a $100,000 cash bond and appointed Denver attorney Jonathan Willett to represent him.

Federal prosecutors earlier said they would support a $250,000 bond for Mattar if he answered the pre-trial questions.

Mattar and four others — former BestBank President T. Alan Boyd of Niwot, former bank financial officer Jack Grace, and Century Finance owners Glenn Gallant and Douglas Baetz — face federal charges of fraud, money laundering and tax evasion in connection with the 1998 collapse of BestBank.

The five are accused of conspiring to artificially inflate the bank’s assets by listing some 500,000 high-risk credit cards as assets and funding the cards with $200 million in depositors’ money as part of a partnership between the bank and Century Financial. Prosecutors claim the inflated assets enabled Mattar and Boyd to give themselves bonuses in excess of $5 million. Grace is alleged to have collected about $120,000 in bonuses, while Baetz and Gallant are accused of paying themselves $5 million bonuses.

The government has alleged that Baetz and Gallant’s Century Financial collected $150 million.

Bank examiners in July 1998 declared the bank — with liabilities outweighing assets by more than $200 million — to be insolvent. The bank was closed and later sold to Pueblo Bank and Trust, but the Federal Deposit Insurance Corp. paid out more than $171 million to depositors who lost their money in the bank. Prosecutors said depositors with more than the insured limit of $100,000 in the bank lost another $27 million.

The government has claimed the bank attracted new depositors while it was failing by offering above-market interest rates on savings accounts.

Matsch on Monday granted a government motion to declare the case complex — a move that removes speedy-trial limits and which will likely push trial dates into 2004. The five were named in a 95-count, 50-page indictment in May following an investigation that began five years ago. No trial date has been set.

As of late Wednesday, it was unknown if Mattar had yet posted the $100,000 bond, which also requires him to live in Denver pending the trial.

B.J. Plasket can be reached by e-mail at bplasket@times-call.com.