Court Dismisses Charges Against Former CEO Of The Bank Of Oswego – Finance and Banking

Pryor Cashman is pleased to announce that U.S. District Court
Judge Michael Simon dismissed with prejudice all criminal charges
against Dan Heine, the former Chief Executive Officer of The Bank
of Oswego. This is a tremendous victory for Mr. Heine, who was
represented at a 29-day jury trial by Jeffrey Alberts, a Partner in the
firm’s Litigation Group who also co-heads the
firm’s Financial Institutions Group.

Federal prosecutors had asked Judge Simon to sentence Mr. Heine
to a term of imprisonment of over 8 years. Pryor Cashman
advocated against this request, which would have been profoundly
unjust, and argued for dismissal of the charges. Mr. Heine now
has prevailed and will not spend any time in prison.

“I could not be happier with the top-notch representation
that I received from Jeffrey Alberts and the Pryor Cashman trial
team,” Dan Heine said.

This victory came after a hard-fought battle. Federal
prosecutors charged Mr. Heine with 27 crimes relating to an alleged
fraud on The Bank of Oswego. Mr. Heine denied that he was
guilty of these crimes and engaged Pryor Cashman to defend
him. Pryor Cashman filed a motion to dismiss, which detailed
prosecutorial errors in obtaining an indictment. The government
then dropped 8 of its charges. At trial, a federal jury
acquitted Mr. Heine on 6 additional counts. On appeal, the
Ninth Circuit vacated the judgment on the remaining charges and
remanded the case to the District Court, which dismissed all
charges against Mr. Heine.

This case established precedents that will serve as critical
guardrails to protect defendants in future criminal cases. Among
other things, it clearly established that statements banks make to
regulators that are literally true do not become criminal
falsehoods simply because they omit information that regulators
believe to be important. 

In this case, the allegedly false statements included entries in
call reports, which are quarterly reports banks submit to
regulators. In holding that statements in these reports did
not violate criminal law, the Ninth Circuit noted that statements
about bank loans that prosecutors described as false were actually
true responses to questions asked in call report instructions
relating to past due loans. The court therefore rejected the
prosecution’s argument that it was a crime to omit other
information that the FDIC would have liked to know about those
loans, such as whether the borrowers were personally responsible
for making loan payments.

In addition to Mr. Alberts, Mr. Heine’s trial team included
Mark Weiner, a former Pryor Cashman associate, and local counsel
Caroline Harris Crowne, a partner at the law firm Tonkon Torp
LLP. Federal Public Defenders Elizabeth Daily and Stephen Sady
represented Mr. Heine before the Ninth Circuit. We are
grateful to Tonkon Torp and Federal Public Defenders for their
assistance in this case and for their contributions to this
successful outcome for Mr. Heine.

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