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Monday, May 9, 2011

John Steffen Re-Indicted; Feds Claim St. Louis Developer Defrauded Bank

Posted By on Mon, May 9, 2011 at 3:08 PM

click to enlarge In 2007, John Steffen (far left) and another developer, Craig Heller, received recognition from First Lady Laura Bush.
  • In 2007, John Steffen (far left) and another developer, Craig Heller, received recognition from First Lady Laura Bush.
Nine months after a court dismissed a federal indictment against John Steffen, the U.S. Attorney's office is again filing charges against the developer, who's best known for transforming warehouses into lofts along Washington Avenue.

Today federal prosecutors announced that they have re-indicted Steffen on charges that he defrauded The Business Bank of St. Louis by pledging Brownfield Remediation Tax Credits as collateral on a loan, and selling them in order 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 allegedly sold $827,415 of tax credits without the knowledge of The Business Bank of St. Louis, and then used the proceeds for other projects.

Last August a similar indictment was tossed out when the court ruled that prosecutors had failed to state a cause of action.

This time around United States Attorney Richard G. Callahan contends that the indictment meets the 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 million.

Steffen's former company, Pyramid Construction, collapsed in a mountain of debt back in 2008.

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