Flagstaff, AZ – Bert Fingerhut has pleaded guilty to making more than $12 million in what the Securities and Exchange Commission calls the most extensive bank conversion fraud they have ever seen. He targeted banks that were about to go public and used the names of friends and relatives to open accounts at the banks. Over the last decade he opened accounts at 65 banks that were about to be traded publicly. Depositors at those banks are entitled to have the opportunity to buy shares in a bank when it converts to a publicly traded company. The SEC says Fingerhut and his conspirators lined their pockets with money that should have gone to legitimate depositors.
In January when Fingerhut found out he was being investigated, he resigned from the Grand Canyon Trust and other environmental organizations with which he was affiliated. Bill Hedden is the executive director of Grand Canyon Trust and has known Fingerhut for 25 years. He says he's not aware that any of Fingerhut's laundered money wound up in the trust's coffers.
HEDDEN: He was not one of our large financial donors. He was wealthy from his work in investment banking in New York long prior to this illegal activity. There has never been any hint that any money he gave to us was from this illegal source. There certainly is no investigation or suspicion that we received money that was tainted.
According to Grand Canyon Trust spokesman Richard Mayol, no individual contributions came from Fingerhut. Mayol says Fingerhut advised a New York fund to contribute to the trust. That fund wishes to remain anonymous.
Fingerhut faces up to five years in prison and a $250,000 fine. In addition he and his conspirators must pay back the $12 million.
For Arizona Public Radio I'm Laurel Morales.