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Ex-banker gets prison for not disclosing private dealings with fraudster

UPDATED: Sat., Jan. 23, 2021

By Phoebe Tollefson Billings Gazette

BILLINGS – A former market president at Rocky Mountain Bank was sentenced to a year and a day in prison Friday for not telling the bank about millions of dollars worth of private dealings he had with a client who later defaulted.

Stephen Phillip Casher, 47, was among the web of people tied to former coal executive Larry Price Jr. who were charged with crimes after Price – facing a reckoning over tens of millions of dollars he owed – staged his own abduction in 2018.

Price has admitted to stealing $40 million through various schemes, including approximately $20 million from former employer Signal Peak mine.

Casher partnered with Price on private business deals, such as a $7.5 million loan Casher and other investors made to finance a mining equipment purchase. Casher later learned Price never delivered on the purchase or other promised deals but kept the money for himself.

Casher did not tell the bank about those outside dealings and the added risk they presented, the judge found.

Casher worked at the Billings bank from 2011 to late 2016 or early 2017. (Watters said two separate dates had been cited as his termination date.)

“You were a banker,” U.S. District Judge Susan Watters said. “You were supposed to comply with rules of ethics, standards of banking. And you didn’t.”

Assistant U.S. Attorney Colin Rubich said Casher enabled Price’s thefts.

“And (Price) was able to worm his way into the community because people like Mr. Casher said nothing. And he said nothing because there was money to be made,” Rubich said.

Casher was aware that Price was having “cash flow” issues in early 2017. But instead of telling the bank about its client’s financial struggles, Casher privately lent Price $700,000 in short-term financing, prosecutors noted in court filings. From that, Casher made $300,000, which was more than his salary at the bank.

Casher went to trial in June on 14 counts but ended the proceedings early, deciding to plead guilty to one count each of bank fraud and money laundering, as he’d been offered under a plea deal.

During trial, Price testified against Casher, saying Casher instructed him to leave certain information off his personal financial statement for Rocky Mountain Bank, which the bank would use to consider his loan applications.

Price said, “he didn’t want nobody to know about the personal financing.”

In pleading guilty, Casher admitted he didn’t disclose a private $900,000 loan he’d made to Price in the days before signing off on a $3.75 million bank loan for Price to invest in a West End subdivision.

Casher also admitted he did not disclose a private $1.5 million loan that Casher had brokered to Price early in 2015. In June, the bank loaned Price $1.18 million for a deal to buy five homes and turn them into rental properties. One of the homes was Casher’s, which Casher disclosed to the bank. But he didn’t disclose the earlier private loan.

Scott Sehnert, executive vice president and market president for Rocky Mountain Bank, testified Friday about the losses the bank incurred in dealing with Price and the exposure Casher created for the bank by not disclosing his own business with Price.

“Had we known that those dealings were going on, we would have never entered into a relationship with Larry Price,” Sehnert said.

Sehnert said it had been difficult to mend the bank’s reputation after customers found out about Price and Casher. Some bank employees missed out on bonuses due to the losses the bank sustained.

Price defaulted on a private line of credit by $167,370.80. He defaulted on a credit card by more than $180,000. Prosecution and defense filings list slightly different amounts.

Defense attorney Mark Parker emphasized the losses Casher suffered as a result of Price’s fraud.

Casher’s share of the $7.5 million fake coal mining loan was $1.25 million. That was under the group Three Blind Mice. In addition to Casher, Three Blind Mice was made up of two Wyoming doctors, Robert Schlidt and Raoul Joubran.

Casher was also a member of Ninety M, an investment group that lost $10.3 million to Price.

“If he did a lot of damage, he did it to himself,” Parker said.

In a short statement before he was sentenced, Casher said he’d suffered financially for his dealings with Price, was trying to spend more time with his children and that he didn’t “have any desire to go to jail, or prison.”

Watters, the judge, noted Casher’s master’s degree and his 17 or 18 years of experience in banking.

“But what I keep coming back to with you, Mr. Casher, is that you knew better,” Watters said.

Casher will be allowed to self-report to prison. Rubich asked for two years in prison, while Parker asked for no prison or probation time. Watters also ordered Casher to pay a $50,000 fine.

No restitution was requested or ordered. The bank could still seek to recoup losses through civil action.

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