When times were good for onetime Villanova University basketball standout turned bank chairman and successful Main Line money manager Barry R. Bekkedam, his tastes tended toward Ferraris, Aston Martins, and travel by private jet.
But that was before the 2008 financial collapse; before he lost millions in investor cash to a $1.2 billion Ponzi scheme; and before the financial institution he cofounded, Berwyn-based Nova Bank, collapsed into a hole, taking with it $91.2 million in FDIC insurance.
Things threaten to grow even worse this week, as Bekkedam and Brian Hartline, Nova's former chief executive, face a federal trial, accused of defrauding a government bailout program in an attempt to dig themselves out of their financial morass.
The U.S. Treasury Department has touted the case as the latest attempt to hold top executives accountable for the financial chicanery that brought the banking industry to its knees nearly a decade ago.
But lawyers for Bekkedam, 48, and Hartline, 51, argued in their opening pitch to jurors Tuesday that in prosecutors' zeal to appear aggressive on financial crimes, they lost sight of a central fact: Nova Bank never actually received the $13.5 million in government bailout funds that their clients are accused of having lied to obtain.
"There is no crime here," Hartline's lawyer Patrick J. Egan said. "This is a fraud case where the defendants got no money and the government didn't lose any money."
Bekkedam, who lives outside Palm Beach, Fla., and Hartline founded Nova Bank in 2002, when they were neighbors in Collegeville, where Hartline still lives.
The 6-foot-10 Bekkedam, who rose to local fame as a forward on basketball teams at Archbishop Carroll High School and Villanova - and then played pro ball in Europe and was an NBA prospect in the 1980s - had moved on to a successful career as a financial adviser with his company Ballamor Capital.
Hartline, who grew up on his grandparents' farm in Berks County, had worked for years as a certified public accountant.
They grew their fledgling financial institution into a powerhouse community bank that had opened at least 12 branches across the region before its collapse in 2012.
But the 2008 recession hit Nova hard and, like many similarly positioned banks, it sought help from the Troubled Asset Relief Program (TARP), the Treasury Department venture set up to stabilize the financial markets during the crisis.
TARP offered Nova a $13.5 million injection of cash, but on the condition that it first raise $15 million from investors to prove its financial viability.
"The idea was not to send public money into a bank that was going to fail anyway," Assistant U.S. Attorney David J. Ignall told jurors Tuesday.
But with investment markets at a standstill, Bekkedam and Hartline, the indictment alleges, turned to friendly investors for the funds and offered to put up Nova's own money. The bank issued a series of loans between June and December 2009 to three men who immediately invested the money back into the bank so it could say it had met TARP'S threshold.
But neither Bekkedam nor Hartline told government regulators that the money they had raised to qualify for bailout funds had come from the bank itself. When others including the bank's own auditors and employees began asking questions, the pair tried to cover up the scheme, Ignall said.
"It's like taking water from one glass, pouring half of it into another, and saying there is twice as much water," Ignall said. "This case is about what both of these defendants did to prop up that bank to make it look stronger than it was."
Despite the investment, TARP eventually denied Nova the bailout funds in December 2009 for reasons unrelated to the allegations at the heart of the prosecutors' case.
But lawyers for Hartline and Bekkedam argued Tuesday that no one from TARP ever asked where Nova's investors were getting their money. The bank had made similar loans in the past to people hoping to invest the money back into Nova, Bekkedam's lawyer Russell D. Duncan said.
"Rich people get loans from banks all the time," he said. "There's nothing unusual - nothing criminal - about it."
What's more, Duncan said, Bekkedam had given up his positions on the boards of both Nova and its holding company by 2007. Although he still held influence over the banks, Duncan said, he had no direct dealings with TARP regulators.
Still, the risk of the strategy became clear in the fall of 2009, when the largest of Nova's three investors - George Levin, whose personal wealth had once been estimated at more than $300 million - became embroiled along with Bekkedam in the collapse of a $1.2 billion Ponzi scheme.
Levin, who made his money in the Philadelphia region before moving to Fort Lauderdale, Fla., had convinced Bekkedam to raise funds to buy into a system pitched by Scott Rothstein, a Miami lawyer and financier.
Rothstein claimed his legal clients were willing to sell the rights to their court settlements in exchange for discounted up-front payments, allowing investors to profit from the difference.
But when Rothstein's venture was exposed as a fraud in 2009, Levin, Bekkedam, and their clients lost millions.
The U.S. Securities and Exchange Commission sued Bekkedam in 2014 for securities fraud in connection with the Rothstein scheme. The case has been stayed until the conclusion of his criminal case.
But for Levin, against whom a jury sided in a similar SEC suit last year, the Rothstein collapse meant he no longer was able to pay back the $5 million loan Nova had given him in 2009, the largest the bank had ever extended.
The defense team said Tuesday that Levin's inability to pay back the loan had little to do with Nova's collapse three years later and was separate from the criminal case - a point on which prosecutors appeared to agree.
"The loan itself is not the fraud," Ignall said. "It was concealing the source of the loans that Mr. Levin used to invest in the bank. That's the fraud."
The trial, which is expected to last four to five weeks, is scheduled to resume Wednesday.