Second Circuit affirms bribery conviction for bank founder who solicited Trump cabinet position via loans to Manafort

MANHATTAN (CN) — A federal appeals court Tuesday refused to overturn the bribery convictions of Stephen Calk, the disgraced former chairman and CEO of The Federal Savings Bank, who was indicted in May 2019 for conspiring to bribe his way into a senior cabinet position in the Trump administration by using his position as the head of a federally insured bank to issue millions of dollars in high-risk loans to Donald Trump’s 2016 campaign manager Paul Manafort.

Calk was found guilty in July 2021 on one count of financial institution bribery and one count of conspiracy to commit financial institution bribery for pushing $16 million in risky loans through his Chicago-based bank for Manafort.

Following the three-week trial, U.S. District Judge Lorna G. Schofield sentenced Calk to a year and a day in prison, plus two years of supervised release, 800 hours of community service and a $1.25 million fine.

He had faced a statutory maximum of 30 years imprisonment on the count of financial institution bribery.

Seeking a reversal of the conviction from the Second Circuit Court of Appeals, Calk argued in a brief that his conduct was not “corrupt” within the meaning of the financial institution bribery statute, and that the loan applicant’s “assistance” in securing Calk’s appointment to a position in that presidential administration was not a “thing of value” within the meaning of the statute.

“Calk could not have reasonably understood that there was anything ‘corrupt’ about receiving these types of referrals in connection with loans that were approved by the bank’s underwriters and loan committee, and on which the bank stood to make outsized profits, or that this conduct could lead to his prosecution and conviction for bank bribery,” Shapiro Arato Bach attorney Alexandra A.E. Shapiro wrote. “If anything, Calk and the bank were victims of the bank fraud that Manafort later admitted committing.”

The three-judge panel found Calk’s challenges to his conviction meritless and affirmed the district court’s judgment that he had had indeed acted “corruptly” within the statute’s definition.

“There is nothing that we have found that suggests that ‘corruptly’ as used in Section 215(a) should have a different meaning from its use in Section 666(a) simply because Section 215(a)(2) involves employees of government-insured financial institutions rather than public officials, and Calk develops no other argument on that front,” the panel concluded in its 42-page opinion.

“Therefore, his challenge fails,” the ruling states.

The Second Circuit also rejected Calk’s argument that Judge Schofield had erroneously instructed the jury regarding how to establish whether the object of the bribery that was solicited or accepted scheme — the “thing of value,” referring to the Trump cabinet appointment — was worth over $1,000.

“We further hold that the jury instructions were proper and that the record includes sufficient evidence that would allow a jury to conclude that Calk, as chief executive officer of a financial institution, improperly facilitated approval of several loan applications in exchange for Manafort’s political assistance, which Calk valued at more than $1,000,” the judges wrote.

The panel was made up by a trio of Democrat-appointed jurists: Senior U.S. Circuit Judge Guido Calabresi, a Clinton-appointee; U.S. Circuit Judge Raymond Lohier, an Obama-appointee; and U.S. Circuit Judge Alison Nathan, a Biden-appointee.

Manafort was convicted in August 2018 in a federal court in Virginia on eight counts of bank and tax fraud, failing to file a report for a foreign bank account and falsifying his income on federal tax returns.

Trump later pardoned Manafort in a torrent of pardons issued at the end of his presidency in December 2020 to his inner circle of loyalists, including Charles Kushner, father of Jared Kushner, and Roger Stone, the conservative political consultant and former business partner of Manafort.

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