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Former 'Nova hoops player found guilty in fraud scheme

A federal jury on Wednesday found two leaders of the defunct Nova Financial Holding Inc. guilty of using a circular loan scheme in a bid to defraud the U.S. Treasury Department's bank bailout program in 2009.

Barry Bekkedam, founding chairman.
Barry Bekkedam, founding chairman.Read moreCLEM MURRAY / Staff Photographer

A federal jury on Wednesday found two leaders of the defunct Nova Financial Holding Inc. guilty of using a circular loan scheme in a bid to defraud the U.S. Treasury Department's bank bailout program in 2009.

Brian Hartline, 51, of Collegeville, and Barry R. Bekkedam, 48, who moved from the Main Line to Florida in 2010, 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.

Bekkedam, who was well-known in the region from his Villanova University basketball days in the late 1980s, in a statement accused federal prosecutors of pursing "trumped-up and false charges."

"The jury was persuaded, but I am and was innocent of any wrongdoing," Bekkedam said.

The jury deliberated for four days before returning its guilty verdict.

In an interview, Hartline's lawyer, Patrick J. Egan, said he and his client were disappointed in the verdict: "I don't think they understood the lack of evidence or the law."

U.S. District Judge C. Darnell Jones II expressed his own doubts about the evidence when he acknowledged motions for acquittal filed by Hartline and Bekkedam.

"The court has serious concerns about the proof offered," Jones said in a footnote to an April 15 order allowing both parties to review trial transcripts and file new briefs.

Prosecutors had charged in a 2014 indictment that Bekkedam, the bank's founding chairman, and Hartline, its chief executive, orchestrated a series of fraudulent loans to customers who would then immediately invest the money back into Nova to help the bank qualify for a $13.5 million bailout.

One of the investors was George Levin, a Fort Lauderdale, Fla., businessman who had helped facilitate Bekkedam's investment of about $30 million for clients in a $1.2 billion Ponzi scheme. Levin received a $5 million loan from Nova.

That Ponzi-scheme debacle led in 2010 to the closure of Bekkedam's Ballamor Capital Management, which had received a line of credit from Levin.

Ultimately, the Treasury Department rescinded its conditional offer of money to Nova for unrelated reasons. Nova, of Berwyn, was closed by the Federal Deposit Insurance Corp. in October 2012.

Of the more than 700 banks that received approval for federal bailout money, only seven had conditional approval, which meant they had to raise additional money from investors to get the federal money, the special inspector general for TARP said.

"The jury has brought justice to these bank executives who defrauded an emergency crisis-era rescue program," said Christy Goldsmith Romero, the TARP special inspector general.

"The fact that the bank did not get TARP funds boils down to luck and timing, not because these defendants decided to come clean," she said.

Egan said he looked forward to an appeal of the conviction.

"If he denies that, it would be appealed to the Third Circuit. Quite frankly, there are so many problems with this case, it may get appealed all the way to the Supreme Court, because the bottom line is my client is not guilty and this is just wrong."

hbrubaker@phillynews.com

215-854-4651@InqBrubaker