Former Cokato, Minnesota, Bank Executive Pleads Guilty to Federal Bank Fraud

Minneapolis - The former president and director of the State Bank of Cokato pled guilty today to federal bank fraud. Robert N. Aanenson, age 52, of Dassel, Minnesota, pled guilty to one count of bank fraud and one count of making a false entry in a bank report. The plea was entered before United States District Court Judge David S. Doty in Minneapolis.

According to documents filed in the case, Aanenson approved a $65,000 loan to Moldserv, Inc., (“Moldserv”) in September of 2003 for the purported purpose of providing the company with “working capital.” That loan, however, was not really for Moldserv. Rather, the loan was intended to benefit a company known as Plastic Solutions. Specifically, just three days after Moldserv received the loan proceeds, $65,000 was transferred to Plastic Solutions. A portion of that money was then used to cover a $47,802 deficit in Plastic Solutions’ checking account, which had been overdrawn for months. The remainder of the money was used for other unauthorized purposes. No payments were ever made on the loan, and in October of 2004, the bank wrote the debt off as uncollectible.

In July of 2004, Aanenson also directed a bank employee to credit Plastic Solutions’ checking account with $92,669.17. At that time, the account was almost $150,000 overdrawn. In addition, Aanenson directed the same bank employee to credit Moldserv’s checking account with $10,242.10, which was the amount that account was overdrawn. Aanenson offset these false transactions by having the bank’s prepaid expense account debited by $100,000 and the account for overdraft charges debited by $2,911.27. As a result of these actions, the bank’s October, 2004, quarterly report to federal regulators at the Federal Deposit Insurance Corporation was inaccurate in that it failed to disclose the bank’s substantial loss.

Aanenson faces a maximum potential penalty of thirty years in federal prison and a $1 million fine on each of the two charges filed against him. The actual sentence will be determined by Judge Doty on a date not yet determined.

This case was the result of an investigation by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal

Investigations; and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant United States Attorney Hank Shea prosecuted the case.

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