Deliberations Begin in Bank Fraud Trial

Jurors in U.S. District Court began deliberating Wednesday over charges that two Thousand Oaks men defrauded state regulators in a bid to keep their failing bank afloat and millions in investments intact.

The jurors deliberated for about half an hour over charges against Phillip L. Chase and Olen B. Phillips before retiring for the night. The jury is scheduled to resume deliberations today at 9 a.m., said Assistant U.S. Atty. Brent Whittlesey.

Chase, 51, of Thousand Oaks and Phillips, 53, of Oak View face charges that they made false statements to the Federal Deposit Insurance Corp. and loaned their own bank’s funds to themselves to keep the bank afloat.

Whittlesey has alleged that the loans were made through “straw borrowers,” who borrowed money from the bank and then loaned it back to Chase and Phillips, who invested it in bank stock. The move was meant to satisfy banking regulators’ orders that the bank strengthen its foundation by raising $8.45 million from investors.

Chase testified that he and Phillips arranged to loan some of the bank’s money to some of its customers, then borrow back the same amount from them and buy enough shares in bank stock to satisfy the banking regulators.

Chase told jurors that he and fellow bank board member Phillips were merely trying to save the bank from faltering under a load of bad loans, a fraud scheme by some customers and the demands of the state banking regulators. He also testified that he did not know such conduct was illegal.

Phillips did not testify during the trial.