A federal appeals court this week upheld the convictions of Barry Bekkedam and Brian Hartline for their roles in an attempt in 2009 to obtain $13 million in bailout money for now-defunct Nova Bank.
In a federal jury trial two years ago, Hartline and Bekkedam, a Villanova basketball player in the 1980s, were found guilty of conspiracy to defraud the federal government, fraud against the Troubled Asset Relief Program, or TARP, and two counts of false statements to the federal government.
The federal government convinced jurors that Hartline and Bekkedam orchestrated a scheme involving "circular loans" from Nova to businessmen who then invested that money back into Nova. The goal was to meet requirements for federal bailout money.
The two former bank executives had previously failed to convince a judge in U.S. District Court for the Eastern District of Pennsylvania that they should be acquitted or get a new trial.
In their appeal to the Third Circuit Court of Appeals, Hartline and Bekkedam argued that "the evidence was insufficient to prove beyond a reasonable doubt that they had knowingly made false representations to the federal government," according to Tuesday's 10-page opinion written by Judge Theodore McKee.
Hartline received a 14-month prison sentence, which he completed serving in January.
"We are extremely disappointed with the decision," said Hartline's lawyer, Patrick J. Egan. "The court never looked beyond the surface issues to examine how arcane the capital rules are. We remain convinced that Mr. Hartline was open, complete and forthright in his dealings with FDIC."