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1 THE COURT: All right. Have you heard the statement

2 of the assistant United States attorney?

3 THE DEFENDANT: I'm sorry, Your Honor?

4 THE COURT: Did you hear what she just said?

5 THE DEFENDANT: Oh, absolutely, yes.

6 THE COURT: Is it true?

7 THE DEFENDANT: Yes.

8 THE COURT: Tell me what's missing here. Why would

9 he do this? He's the vice-president of this bank?

10 MR. LeFEVOUR: Yes, Judge, one of the

11 vice-presidents.

12 MS. STERN: Vice-president of the loan department.

13 He was essentially giving loans to customers and falsifying

14 documents.

15 THE COURT: For the heck of it? Because he hated his

16 bank? Because what? Was he getting something out of it?

17 MS. STERN: Judge, the government --

18 THE COURT: I'm trying to understand this.

19 MR. LeFEVOUR: Should I?

20 MS. STERN: Sure.

21 MR. LeFEVOUR: Your Honor, what my client has told

22 myself and the government through Miss Stern and the agents,

23 many of these clients were going through difficult times, so he

24 would create these loans in a way that he thought he was

25 helping the clients and the bank by issuing them more money in

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1 situations where they would not have sufficient collateral or

2 security to get these loans, always with the hope that they

3 would pay off the loans, and, finally, when it came true and

4 the bank did their examinations, they found these loans.

5 It is my understanding and it's been communicated to

6 the government, I think a financial analysis would bear this

7 out, that Mr. Gonsiewski made -- there was no quid pro quo for

8 these loans, he did not make any money from them, but he

9 certainly was involved in the activities that allowed these

10 loans to be created, to be issued, and to be funded.

11 THE COURT: All right. Tell me a little bit about

12 what you did.

13 THE DEFENDANT: Well, Your Honor, it's exactly what

14 Mr. LeFevour just said that I, I thought I was helping the

15 customer stay afloat, so to speak, as the times got bad and

16 that economically it would improve and everything would go back

17 to a normal situation and those loans would be paid off, times

18 would get better, other property would sell, the bank would not

19 take a loss. But the --

20 THE COURT: So without coercion or anything, you

21 freely, falsely created all these documents?

22 THE DEFENDANT: Yes.

23 THE COURT: Which amounted to fraud on your bank?

24 THE DEFENDANT: That's what it amounted to, Your

25 Honor.

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1 THE COURT: And you understood that?

2 THE DEFENDANT: At the time?

3 THE COURT: Well, you understood that you were

4 falsely providing documents and that that's why they were

5 loaning more money?

6 THE DEFENDANT: Yes.

7 THE COURT: That's a summary, I guess.

8 THE DEFENDANT: Yes, that's the summary, yes, Your

9 Honor.

10 MR. LeFEVOUR: His defense, Judge, you know, in the

11 conversations with the government and with his employers was

12 that he always thought that things would get better and that

13 the money would be repaid. It was never where he thought that,

14 you know, this money was just going to go away.

15 THE COURT: It's a lot of money.

16 MR. LeFEVOUR: I understand that. That was the

17 motivation at the time, Judge.

18 THE COURT: All right. Well, I was trying to

19 understand that. Okay. People always think it will get

20 better.

21 MS. STERN: Judge, I believe that he is admitting

22 that he made false representations.

23 THE COURT: Right. I just wanted to understand it.

24 There seemed to be something missing in the sense of -- I just

25 wasn't understanding exactly what was going on. Was it his

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1 brother-in-law, was he getting kickbacks? It doesn't mean it

2 wasn't criminal. It would be criminal anyway. But I just

3 wanted to understand what was going on.

4 MR. LeFEVOUR: They were customers, Judge, and

5 there's no evidence of any kickbacks.

6 THE COURT: All right.

7 MR. LeFEVOUR: That's where we are at.

8 THE COURT: A lot of it seemed to be one customer,

9 but apparently there were others as well.

10 MR. LeFEVOUR: But no family relations that type of

11 thing.

12 THE COURT: Okay.

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