The U.S. Justice Department has dropped charges against the former CEO of the Bank of Oswego and is expected to soon settle with the former chief financial officer in a deal that includes no prison time.
Dan Heine, co-founder and the senior executive at the tiny Lake Oswego bank, is in the clear. Federal prosecutors decided in January that they would not retry the case after a U.S. Appeals Court panel threw out his conviction at the lower court.
The most serious charges against former CFO Diana Yates also were thrown out. She is working with federal prosecutors to cut a plea deal that would allow her to serve no prison time, according to two sources close to the case.
The tentative deal calls for Yates to plead guilty to one misdemeanor count and serve an unspecified period on probation.
Yates’ attorneys declined to comment.
Heine said he’s “grateful to have my life back.” He has insisted since his 2015 indictment on bank fraud and other charges that he was innocent.
“Although it took seven painful years out of my life, justice finally prevailed,” Heine said. “I am grateful that the US Department of Justice finally did the right thing.”
As chronicled by The Oregonian/OregonLive, bank management engaged in several unusual lending deals in an attempt to spur growth at the struggling institution.
Heine was arrested in 2015. By that time, he had retired from the struggling bank.
After a marathon 29-day trial, a jury found Heine and Yates guilty of one count each of conspiracy to commit bank fraud and 12 counts each of falsifying bank entries.
On June 3, 2018, Heine and Yates were sentenced to two years and 18 months, respectively, in federal prison. Both appealed.
The 9th Circuit Court of Appeals overturned the convictions, saying prosecutors had failed to prove bank executives had conspired to commit fraud, and sent the case back to the local U.S. District Court level.
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Heine said he is still wondering how he wound up in prosecutors’ crosshairs, noting that he was the one who called authorities in the first place alerting them to potential wrongdoing inside the bank in 2012.
Heine pointed the finger at Geoff Walsh, a bank loan officer he had hired to jump-start the bank’s business. Walsh himself was convicted on fraud charges in a case unrelated to the bank and was sentenced to 30 months in prison. After his arrest, Walsh cooperated with prosecutors in the Bank of Oswego case and testified against Heine and Yates in their trial.
“It is hard to imagine what it’s like to have your life and the lives of your family overturned for doing the right thing after discovering suspicious financial malfeasance in my bank and personally calling in the FBI,” Heine said.
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