Local Real Estate Developer Re-Indicted on Bank Fraud Charges

ST. LOUIS—The United States Attorney's Office announced today that John R. Steffen was re-indicted on fraud charges involving his scheme to defraud The Business Bank of St. Louis by pledging Brownfield Remediation Tax Credits as collateral on a loan and selling them to use the proceeds for other projects.

The indictment alleges that in May 2007, Steffen used the tax credits as collateral to obtain a loan from The Business Bank of St. Louis to MB Lofts, LLC in the amount of $1,115,633. The purpose of the loan was for environmental cleanup and remediation of the Metropolitan Building. On December 21, 2007, Steffen sold $827,415 of tax credits without the knowledge of The Business Bank of St. Louis, and then used the proceeds for other projects.

Mr. Steffen was originally indicted for these transactions in August 2010; however, that indictment was later dismissed by the court for failure to state a cause of action. United States Attorney Richard G. Callahan observed that while the latest indictment does not charge any new scheme, the indictment did represent an effort to meet the legal shortcomings which the court found in the first indictment. The new indictment charges two felony counts of bank fraud, one felony count of mail fraud, and one felony count of wire fraud.

If convicted, each count of the indictment carries a maximum penalty of 30 years in prison and/or fines up to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant United States Attorneys Michael Reap and Steven Muchnick are handling the case for the U.S. Attorney's Office.

As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.