Vikings tight end Stu Voigt has been accused by the FDIC of “personal dishonesty.”
Charles Bjorgen, Star Tribune
Federal bank regulators go after ex-Vikings great Voigt
- Article by: JENNIFER BJORHUS
- Star Tribune
- January 27, 2012 - 11:35 PM
Stu Voigt lined up at tight end for the Vikings in three Super Bowls during the 1970s, winning a place on the team's list of its 50 greatest players.
The banking career he pursued after football may be headed for a less glorious ending.
The Federal Deposit Insurance Corp. (FDIC) disclosed Friday that it has proposed barring Voigt from banking and fining him $125,000, citing a pattern of reckless misconduct and "personal dishonesty" while he was chairman of First Commercial Bank in Bloomington.
Voigt, a member of the bank's loan committee, allegedly engineered lines of credit to a real estate investment company in which he himself was deeply involved, called Hennessey Financial. The line of credit went into default in 2008, resulting in the bank charging off $787,956, the FDIC said.
Voigt, 63, of Apple Valley, left First Commercial Bank in 2008. He didn't return a phone call Friday, but his attorney, Phil Cole, said they are fighting the FDIC's action.
"Stu was a huge investor in the bank. He lost over $3 million," Cole said. "It's ludicrous to suggest he would have done something to harm the bank."
The matter is set for a hearing before an administrative law judge.
In a notice the FDIC made public Friday, it described Hennessey Financial as a real estate lender owned by a person identified throughout the document as "Mr. X**." Lawyers with knowledge of the matter said Mr. X is Jeffrey A. Gardner, a national real estate developer who lived in the Twin Cities.
First Commercial Bank gave Hennessey a line of credit for at least $2 million from 2005-2007, according to the FDIC notice, but Voigt never disclosed that he was receiving payments from Hennessey, Mr. X and other Hennessey-related companies.
At the time the bank made the loans, Hennessey Financial was paying Voigt about $50,000 a month, according to the FDIC. Mr. X was also paying Voigt an additional $54,000 a month for personal loans Voigt gave him.
Cole, Voigt's attorney, said the FDIC is "misrepresenting the circumstances under which the bank loaned money to Mr. Gardner."
Efforts to locate Gardner on Friday were unsuccessful.
First Commercial was a big commercial real estate lender that was battered by the crash in property values. State banking regulators hit the bank with a cease-and-desist order in 2009, ordering it to clean up its load of bad loans.
The proposed fine for Voigt is a sizable one for Minnesota, where most banks are small. FDIC civil monetary penalties can range from thousands to millions of dollars.
For Voigt, it's the latest legal snarl. Last year former Vikings player Ron Yary, who was one of Voigt's close friends, and three other people together sued Voigt for securities fraud in U.S. District Court in Minnesota.
They accuse Voigt of bilking them out of more than $1 million after he persuaded them to invest in Assured Financial and Hennessey Financial, investment companies operated by Gardner to finance his own and other developments. A third company, called Jaguar Financial, was also involved.
Voigt was an officer, director and major equity holder in both Assured and Hennessey. According to the complaint, he repeatedly assured the four that their investments were risk-free and they could "sleep like a baby."
Voigt also allegedly failed to disclose that he was pocketing commissions on the investments. Voigt gave Yary a financial statement saying he was worth $10.3 million.
All the companies failed, according to the complaint.
"The whole thing just collapsed," said Kevin Magnuson, an attorney for the investors. "It's unbelievable."
The case is still in discovery and won't go to trial until next year, he said.
One of the investors, Ken Resnick of Edina, described himself as having been a personal friend of Voigt's. He said he lost his entire life savings with Voigt, as did his mother, Marion.
The investors received victim impact statement questionnaires from a U.S. Postal Inspection Service investigator in St. Paul, indicating that a federal criminal investigation is underway. That office confirmed there was an active investigation, but wouldn't discuss it.
Magnuson called the FDIC's proposed order "a welcome development."
He said two of the investors in Voigt's scheme were elderly -- "vulnerable, unsophisticated investors who lost every penny."
Jennifer Bjorhus • 612-673-468
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