By Rachel Lippmann, St. Louis Public Radio
St. Louis – The former head of a collapsed real estate company in St. Louis has been indicted on federal bank fraud charges.
The indictment accuses John. R. Steffen, the CEO of Pyramid Cos. before the development firm went bankrupt, of selling tax credits he had previously pledged as collateral for a loan.
According to the indictment, in March 2007, Steffen received nearly $1.5 million in brownfield credits for a project to turn the Metropolitan Building in the Grand Center arts district into commercial and hotel space. State law allows recipients to use the tax credits as collateral for a loan, and Steffen did so two months later to borrow $1.1 million from The Business Bank of St. Louis to do environmental remediation and clean-up.
The indictment alleges that in December 2007, Steffen turned around and sold almost $830,000 of the credits without the knowledge of the bank, and used the proceeds to fund other redevelopment plans.
Steffen, 52, is charged with a felony count of bank fraud, which carries a maximum penalty of 30 years in prison and/or fines up to $1,000,000.