Indictment Accuses Former Bank Chairman of Profiting From Loans

Craig E. Caldwell, former chairman and majority shareholder of the now-defunct Western National Bank in Santa Ana, was indicted by a federal grand jury Wednesday. He is accused of profiting from fraudulent loans that cost the bank about $600,000.

He faces multiple felony counts of making false entries in bank records, of making false statements on bank loan applications and of misapplying bank funds.

The indictment alleges that Caldwell personally received at least $225,000 of the loan proceeds.

Western National, which was founded in 1980, was declared insolvent and seized by regulators in August, 1982. Until then, however, it had been Orange County’s fastest-growing bank.

Caldwell “used other people as straw borrowers and reaped the benefits” of certain loans that he arranged, said Assistant U.S. Atty. Patricia L. Collins, the government prosecutor assigned to the case.

The indictment also accuses Caldwell of violating federal banking regulations, alleging that he personally borrowed $200,000 from Western National. That amount exceeds the limit on what bank directors can borrow from their own institutions.

Caldwell Denies Charges

“Mr. Caldwell denies the charges and expects to be acquitted at trial,” said Caldwell’s attorney, Jan Lawrence Handzlik. “Mr. Caldwell has cooperated with the government throughout the investigation. It is unfortunate that the government has chosen to bring these charges nearly six years after the fact.”

Caldwell lives in the Los Angeles area now, but Handzlik would not say what kind of work he is doing.

In November, a federal judge sentenced Western National’s former president, John G. Willett, to four years’ probation on similar charges. Willett was also fined $15,000 and ordered to perform 1,500 hours of community service work.