Former bank president admits to fraud

A former bank president has admitted in federal court that he defrauded his bank in LeRoy, Minn., out of more than $200,000.

Gerald Alan Payne, 53, of LeRoy, pleaded guilty last week in Minneapolis to bank fraud and tax evasion while serving as president and CEO of First State Bank Minnesota.

According to Payne's plea agreement, from January 2003 through June 2007, he misappropriated funds by stealing from customer bank accounts, charging personal expenditures on the bank's credit cards and cashing checks written to the bank and other parties while retaining the proceeds.

Also, from January 2003 through April 2008, Payne willfully attempted to evade payment of taxes for tax years 2003-2007. The resulting tax loss to the federal government is more than $200,000.

Payne also admitted that he defrauded certain individuals for whom he served as trustee or in a comparable trust capacity.

Payne faces a maximum sentence of 30 years in prison on the bank-fraud count and five years on the tax-evasion count. Sentencing has yet to be scheduled.

PAUL WALSH