NEWARK, NJ – A man in Warren County, New Jersey today admitted his role in a scheme to defraud a bank and bank regulators, Acting Prosecutor Rachael A. Honig said.

Gary Ketchum, 73, of Hackettstown, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to a substitute information accusing him of conspiracy to make false entries to deceive the First State Bank and Federal Deposit Insurance Corporation, FSB regulators.

According to the documents filed in this case and the statements made in court:

A three-phase program ran from 2009 to 2010. The first phase consisted of fraudulently injecting $ 7 million in capital into the First State Bank (FSB). In the second phase of the scheme, the conspirators tricked the FSB into granting millions of dollars in loans based on material misrepresentation to cover up the fraudulent nature of the capital injection and to end investigations by FSB auditors. The final phase was to lie to the FDIC and FSB, among others, about the infusion of capital and fraudulent loans.

In May 2017, a conspirator, Donna Conroy, pleaded guilty to her role and is awaiting sentencing. In October 2018, Ketchum, along with conspirators Joseph Natale, former FSB CEO, formerly of Cranford, New Jersey, and Albert Gasparro were charged with conspiracy to deceive the FDIC and FSB, deceive these two entities, conspiring to sight of committing bank fraud, and bank fraud. Natale is to be tried before Judge McNulty from November 1, 2021. The charges against Gasparro remain pending.

The conspiracy count to which Ketchum pleaded guilty carries a potential maximum penalty of five years in prison and a fine of $ 250,000, which is double the gross pecuniary gain from the offense or double. of the gross loss suffered by any victim. Judgment is scheduled for June 28, 2021.

Acting US Attorney Honig credited the Special Agents of the FDIC – Office of the Inspector General, under the leadership of the Special Agent in Charge Patricia Tarasca; special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of the special agent in charge George M. Crouch Jr .; and inspectors from the Office of the Special Inspector General for the Distressed Assets Relief Program (SIGTRP), under the direction of Special Inspector General Christy Goldsmith Romero, the investigation leading to today’s guilty plea. hui.

The government is represented by Ari B. Fontecchio of the Economic Crimes Unit of the United States Attorney’s Office, District of New Jersey.

The charges and allegations against the other defendants are only charges, and they are presumed innocent until proven guilty.