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Bank fraud defendant seeking to have $1 million baiAssociated PressMADISON—A 29-year-old Canadian accused of defrauding Strong's Bank of Dodgeville out of $2 6 million a week before the bank faded will continue an effort next week to have his $1 million bail reducedA bail review hearing that began Friday was continued to give Brian F Szott’s new attorney, James Ewers of Madison, time to get acquainted with the case.Szott’s original lawyers, brothers Mark and Stephen Eisenberg, withdrew from the case Friday, but denied the move had anything to do with alleged ties between their family’s Madison law firm and Strong’s BankSzott told U.S. District Judge Barbara B. Crabb he had requested the substitution.U.S. Attorney John R Byrnes sani Mark Eisenberg has been subpoenaed to testify before a grand jury investigating the bank’s failure. Byrnes has said corporations formed by Mark Eisenberg benefited from loans made bv Strong’s Bank, and that the Eisenbergs’ father, Donald Eisenberg, was a member of the bank's board of directors and legal counsel for the bankStephen Eisenberg denied Byrnes’ allegations.“There are no ties between my family and Strong’s Bank,’’ he said after the hearing recessed.The hearing, called by the Eisenbergs to review Szott’s $1 millioncash bail, is to continue Monday.Szott, of St. Albert, Alberta, was arrested by FBI agents in Madison Thursday.He is accused of writing and falsely certifying a $2.6 million check against his $200 account in Strong’s Bank June 7. He had been a director of the bank since May 13 and chairman of the board since Mav 28.Byrnes said Szott, a Canadian citizen, deposited the check in a bank in the province of Alberta The money was then dispersed among a number of accounts, Byrnes said, and has not been recoveredThe $2.6 million check was made pay able to Vickerson and Hankin-son, an Edmonton law firm. A spokesman for the firm said the money was “just for personal business,” for “the sale of a house, that sort of thing ” The spokesman refused to comment further.The FBI was alerted to the alleged fraud by the Federal Deposit Insurance Corp , which is investigating the bank’s failure.The bank, one of two in the Iowa County city of 3,500, was declared insolvent and closed by the state banking commissioner’s office June 14 It had $31 million in assetsThe bank was purchased by the Marshall and Ilsley Corp. of Milwaukee and reopened Wednesday as the MI Bank of Dodgeville.In an interview with the Capital Times prior to his arrest, Szott said he became involved with Strong’sI reducedBank in May after reading an ad in the New York Times that said it was for sale.He said he represented “a number of investors that wanted to get into the banking business.” He would not name the investors, but said they wanted to buy a number of banks across the U S in anticipation of legislation that would allow banking across state linesSzott also said he offered $2 4 million on June 12 to keep the bank from closing, but the FDIC and the state banking commissioner turned down the offerGerry Szott, the wife of Brian Szott’s cousin, John Szott, also of St Albert, said Szott was the insurance agent for the Ghermezians, four wealthy Iranian brothers who are involved in a large shopping mall development project in Edmonton.The FDIC is also investgating the dealings of Strong’s Bank with money brokers, including High Yield Management Inc. of Clifton, N.J. The firm had deposited $1.1 million in the bank on behalf of other financial institutions, the FDIC saidPayment on those deposits, which were in fully-insured, $100,-000 certificates of deposit, is being withheld pending the investigation, according to the FDIC.FDIC Chairman William Isaac, who has long warned of the dangers of brokered deposits, has said he plans to make a test case out of the Strong’s Bank failure.
Newspaper Details
Janesville Gazette
Janesville, Wisconsin, US
Sat, Jun 22, 1985
Page 15
Full Page
Clipped by
Madison P.
WI, USA 11 Nov 2024
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