June 14, 2005
FORMER PRESIDENT OF CONNECTICUT BANK OF COMMERCE PLEADS GUILTY TO MISAPPLICATION OF BANK MONIES
Kevin J. O'Connor, United States Attorney for the District of Connecticut, announced that J. DONALD WEAND, age 59, of 954 Ridgefield Rd, Wilton, Connecticut, pleaded guilty today to a felony count of misapplication of bank monies. WEAND was the President of the Connecticut Bank of Commerce ("CBC"), a Connecticut Bank with deposits insured by the Federal Deposit Insurance Corporation. Senior United States District Judge Peter C. Dorsey accepted WEAND's plea of guilty this morning in New Haven federal court.
According to documents filed with the Court and statements made in court, on March 29, 2000, WEAND, at the direction of a CBC insider ("the CBC Insider"), arranged for a loan of $1,350,000 to be made by CBC to Moore Advisors, Inc. ("Moore Advisors"), although WEAND knew that no board approval had been obtained for the loan, which was required. WEAND also had no documentation to suggest that Moore Advisors had any assets, operations, income, other means to support the loan, or even wanted a loan, and the CBC Insider seeking to push through the loan had just days before orchestrated a series of loans of suspect creditworthiness. WEAND knew that, by following the CBC Insider's instruction, the natural effect of his actions was to put CBC at substantial risk of loss.
On December 4, 2000, the Moore Advisors loan balance was paid off from CBC loan proceeds stemming from a new loan of November 28, 2000, to NetTech Solutions, LLC ("NetTech"), a company run by a family member of CBC's Chairman of the Board. At the direction of the CBC Insider, WEAND recommended and the Board approved this loan, which WEAND knew was made to a company that had limited assets, significant debt load, and lacked the financial resources as an operating entity to repay the loan, particularly as a portion of the monies were used to retire the Moore Advisors loan, not for operations. The only security offered for liquidation to repay the loan was the stock of a small start-up entity that had recently gone public. This stock ultimately was unavailable as security because it was sold, unbeknownst to WEAND, at the direction of the CBC Insider. While instrumental in the misapplication of the bank funds, WEAND did not appropriate the loan proceeds for his personal use or benefit.
Judge Dorsey has scheduled sentencing for September 12, 2005, at which time WEAND faces a maximum term of imprisonment of 30 years and a fine of up to $1,000,000.
This case was investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation. The case is being prosecuted by Assistant United States Attorney Christopher Schmeisser.
CONTACT:U.S. ATTORNEY'S OFFICE Tom Carson (203) 821-3722 thomas.carson@usdoj.gov
Last Updated 6/16/05