BANKING & FINANCE - March 3, 1995

Banks Feud Over Loan Fraud Case: Two of the nation’s biggest banks, both of which lent money to a welder-turned-financier who has been indicted for fraud, are brawling in court over whether one should have warned the other about the alleged con man. Citicorp claims in a civil suit in New York that Bankers Trust New York Corp. knew William J. Stoecker had credit problems but didn’t share the information when Citicorp asked about Stoecker before lending him money. Stoecker is accused of scheming to borrow more than $400 million from 25 banks by using fake documents and flaunting lavish habits that made him look like a worthy credit risk. Bankers Trust was fully repaid by Stoecker. Citicorp lost $143 million on the loans and wants Bankers Trust to reimburse it and pay $100 million in punitive damages.