Newspaper article St Louis Post-Dispatch (MO)

Former Banker Shaun Hayes, Developer Michael Litz Indicted for Bank Fraud

Newspaper article St Louis Post-Dispatch (MO)

Former Banker Shaun Hayes, Developer Michael Litz Indicted for Bank Fraud

Article excerpt

Shaun Hayes, who led several St. Louis area banks before regulators banned him from the industry, now faces a new round of legal troubles.

Hayes and developer Michael Litz were indicted for alleged bank fraud and misapplication of bank funds from Excel Bank, a Sedalia, Mo.-based financial institution that failed in 2012.

Hayes also was indicted by the grand jury Wednesday for allegedly causing false entry in bank records, according to court documents unsealed in federal court Friday. Each felony count carries a maximum penalty of up to 30 years in prison and fines of up to $1 million, the U.S. Attorney's office said.

The indictment accuses the two men of fraudulently using Excel funds to bail out failing investments. The alleged scheme involved Hayes using his position as Excel's controlling shareholder to push through improper loans and then concealing the nature of those loans from the bank.

Hayes, 56, of Frontenac, was arrested Thursday night and made his first appearance before U.S. Magistrate Judge Shirley Mensah Friday afternoon, handcuffed and wearing a gray-and-white striped prisoner's uniform. Hayes will be held in custody until at least his detention hearing and arraignment Tuesday, the judge said.

Hayes said little during the hearing other than to say he was arrested at his son's baseball game, in response to a question from the judge.

Hayes' attorney, Karl Dickhaus, declined to comment on the case after the hearing concluded. He said his client intends to plead not guilty.

Litz, 61, of Ladue, is expected to turn himself in early next week. He could not be reached for comment.

Hayes bought a controlling stock interest in Excel Bank's parent company in 2007, according to the indictment. Excel had a loan production office in Clayton and a branch in Kirkwood.

Litz was an owner and president of Eighteen Investments, which marketed properties under the name Bellington Realty, one of the largest buyers of foreclosed homes in the St. Louis area following the housing bubble in 2006.

Hayes and Litz were co-owners of McKnight Man I LLC, which was seeking to develop property at Manchester and McKnight roads in Rock Hill.

In 2009, Centrue Bank threatened to sue Hayes and Litz after the McKnight Man loan became delinquent. At around the same time, Centrue sued Eighteen Investments, Litz and others over delinquent loans that the business had borrowed.

The Eighteen Investments and McKnight Man loans owed to Centrue totaled over $4 million.

Hayes used his status at Excel to have the bank buy the delinquent loans from Centrue, the indictment alleges.

Hayes and Litz allegedly worked together to have Excel Bank issue a $3.3 million loan to a straw party identified only as 'LS,' and those proceeds were used to pay off the Eighteen Investments and McKnight Man loans owed to Centrue. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.