A former executive at Greeley-based New Frontier bank pleaded guilty Tuesday to engineering a series of fraudulently obtained loans, including some used in a failed bid to keep the institution from collapsing.

Gregory William Bell, 54, faces up to 50 years behind bars and could be asked to pay as much as $7 million in restitution. Such a long prison term, however, appeared unlikely, given that prosecutors asked the court to consider his cooperation in their investigation when he is sentenced.

Bell is scheduled to be sentenced by U.S. District Judge Lewis Babcock April 30.

The charges against him covered actions he committed in the four years leading up to New Frontier's failure in 2009. In 2010, Bell and several other of the bank's officials, including Larry Seastrom, Robert Brunner, Timothy Thissen, John Kammeier and Jack Renfroe, were banned from banking.

The Federal Insurance Deposit Corp. ordered a criminal investigation into all of the officials, but Bell is the only one to have been charged thus far.

In entering his pleas, Bell conceded that he made false bank entries, was guilty of bank fraud and engaged in money laundering.

According to the plea agreement, Bell joined New Frontier Bancorp in 2001 as a vice president in the bank's agricultural lending department. He was eventually promoted to chief lending officer and, as part of that job, sat on the bank's two loan committees, meaning he helped sway decisions on whether to approve bank loan applications.

In July 2003, prosecutors said, Bell helped arrange a deal between a dairy farm owner and two other individuals — prosecutors have withheld their identities — who bought 1,900 cows and leased them to the farmer. The farmer agreed to the deal because he had reached the bank's legal lending limit and the bank was unable to loan him money that he would have used to buy the cows himself.

The individuals who bought the cows did so on the understanding that they would receive a $2.5 million loan from the bank to move forward. Bell misled the loan committee by saying that the collateral pledged on the loan — a $100,000 CD — belonged to the borrowers when, in fact, it was held by a sister of one of the individuals seeking the loan.

That woman, as it turned out, had been dating Bell since 2002 and was engaged to him. She was identified in the paperwork only as "B.F."

Among other points that he failed to disclose, Bell never divulged that the woman's share of the profits — about $10,000 a month — would be deposited into a joint bank account in their names.

Between November 2005 and December 2008, the woman received 37 checks for a total amount of $389,126.78.

In another deal that led the charges against him, Bell used his parents to help engineer a series of transactions in 2007 involving the same dairy farm owner — identified only as J.J. Bell persuaded his parents to take out a $9.7 million loan from New Frontier and then misapplied about $662,000 of the loan proceeds by writing a check in that amount to the dairy farmer. The bank had never been told that any of the loan proceeds would go to J.J. or his company.

Some of the money — about $75,000 — also ended up in Bell's own accounts and his joint account with B.F. She used the money to pay down a line of credit that she had used in early 2008 to buy a Corvette. Shortly after that purchase, Bell and B.F. had ended their relationship. Bell kept the car.

By the fall of 2007, matters at New Frontier had drawn the attention of federal regulators who found that the bank's condition had "deteriorated to less than satisfactory."

In response, the NFB board in early 2008 signed an agreement with the Federal Deposit Insurance Corp. and Colorado banking commissioner pledging to take corrective action. That action was to include boosting its capital. In their effort to do so, board members bought shares in NFB. But it wasn't enough, so more shares were sold, often using money borrowed from the bank itself.

Among the borrowers were eight individuals who were Bell's customers and who bought the stock at his request and on the basis of information that he provided or failed to disclose.

None of the borrowers were told about the bank's condition, and, in fact, some said Bell told them "the bank was solid."

In some cases, Bell required customers seeking new NFB loans to use some of the loan proceeds to purchase shares in the holding company as a condition of receiving the loans.

Bell, prosecutors said, made sure none of the loan paperwork reflected any of that.

Senior NFB officers, the government said in its plea agreement with Bell, were aware of Bell's scheme.

The eight loans he helped arrange were for more than $20 million and the borrowers used about $4.3 million to purchase stock in the holding company. Bell's parents were among this group, buying $500,000 in stock after taking out a $663,000 loan.
Less than a year after the shares were purchased, they had become worthless. State regulators closed New Frontier Bank in April 2009.

Under the plea agreement, Bell agreed to forfeit $235,000, the money he obtained as a result of his criminal activity.

Bell also agreed to cooperate with prosecutors who may call him as a witness before a grand jury investigating New Frontier's collapse.

"The defendant agrees that if he is called as a witness before any such grand jury or any such hearing or trial, he will testify truthfully, candidly and completely," the government said in the plea agreement.

Bell, according to the government's paperwork, already has provided "substantial assistance" in the investigation of the collapse, prompting prosecutors to ask the court to "depart downward" from sentencing guidelines.