December 4, 2020

Caity Roach
Editor

Fraud Friday — Crown Bank CEO Sentenced to a Year in Prison for Defrauding Investors

The former CEO of Minneapolis-based Crown Bank, Peter Dahl, has been sentenced to a year and a day in federal prison for using bank customer accounts to cover his own personal debts and abusing his position to defraud several investors of more than $400,000.

From 2015 to 2017 Dahl orchestrated a scheme in which he used various Crown accounts to cover his debts and expenditures without permission from the bank’s board of directors or shareholders. He also arranged loans from individuals which were falsely described as loans to third parties, but with the funds actually going to himself. 

To conceal the fraudulent activity, Dahl kited checks, falsified bank records, and filed inaccurate income tax returns. As a result of failing to disclose on his federal tax return the income that he earned from making fraudulent loans to himself, the IRS lost more than $250,000.

In March 2017, Dahl added to his scheme by beginning to defraud prospective investors in Crown Bank’s holding company, Crown Bankshares. To entice investors to buy shares, Dahl represented that a merger with another bank was “imminent,” and that he was negotiating for the other bank to purchase Crown. Dahl specified a per-share premium of 25 percent to be received by investors and that he would remain with the surviving entity in a controlling management capacity. In reality, Dahl was under scrutiny by the FDIC and was not in the process of negotiating a merger. Based on Dahl’s misrepresentations, prospective investors paid hundreds of thousands of dollars to purchase bank stock.

On November 16, 2020, Dahl was ordered to pay $468,799 in restitution, forfeit $40,000 he had paid to purchase Crown Bankshares stock, and serve a year and a day in federal prison. 

Sources:
The Department of Justice