Prosecutors seek 10-year sentences for principals in Pinehurst Bank scheme in Minnesota

FROM TWINCITIES.COM -

Federal prosecutors are seeking 10-year prison terms for John Markert and George Wintz, who were convicted in April on charges related to a $1.8 million check-kiting scheme at the former Pinehurst Bank in St. Paul.


But attorneys for Markert, the former president of Pinehurst, and Wintz -- a trucking company owner who was a major customer at the bank -- want sentences that involve probation or home confinement.


The two were convicted following a 12-day trial that found Markert, 58, of Mendota Heights, guilty on five counts of misapplication of bank funds, along with an acquittal on bank fraud charges.

Wintz, 72, of Minneapolis, was found guilty of bank fraud and embezzlement, while being acquitted on the misapplication-of-funds charges.

Prosecutors filed papers Monday, Aug. 6, arguing for the 10-year sentences. The dueling position papers about what punishment the two should receive revisit disagreements at trial about whether the bank actually lost any money. Both sides also disagree with portions of a pre-sentence investigation by probation officers, which assigns "offense levels" to the crime and can push a recommended prison sentence up or down.

While the probation office found that Markert, for instance, should see his offense level rise because he abused a position of trust at the bank and jeopardized the bank's soundness, his attorneys disagree.



They argue that Markert was trying to save the bank from insolvency after Wintz's overdraft, and that a sentence of probation is appropriate.



Meanwhile, Wintz's attorney, Andy Luger, is asking for a "creative and unique" sentence for his client. He argues that Triangle Warehouse -- Wintz's trucking and warehouse company in Northeast Minneapolis, which employs more than 130 people full-time -- shouldn't have to go out of business.



Luger requests a prison sentence for Wintz that runs on weekends, confines him to his home when he's not working, and suggests a court-appointed financial monitor to watch his business dealings.



"In his few remaining productive years in business, Wintz requests that he be allowed to serve a sentence that allows him to save the jobs and careers of his employees," Luger argued in his position paper.



Evidence at trial showed that Wintz had a history of kiting checks -- which involves flowing funds between two checking accounts at different banks to cover overdrafts -- and that bank employees had made Markert aware of it. When Wintz's kiting produced the $1.8 million overdraft in 2009, Markert helped put together a scheme to originate loans in the names of five people -- including Wintz's daughter and a long-time employee -- to cover the overdraft.



Prosecutors say those five "nominee loans" were fraudulent, and that the actual loss in the case is $1.8 million. Attorneys for Markert and Wintz argue that the bank didn't lose any actual cash, and that Wintz continues to make payments on the five loans, which are now held by Coulee Bank, based in Wisconsin.



The jury cleared a third defendant at trial, Greg Pederson, a former senior loan officer at Pinehurst, on all counts.



Sentencing dates have not been set for Markert and Wintz.



The final decision on sentencing will be up to U.S. District Court Judge Ann Montgomery, who is handling the case.