A federal grand jury recently indicted Lee Baker Jr., a prominent real estate developer, for alleged fraud for making false statements to obtain loans from Denali Alaskan Federal Credit Union.
Baker allegedly made several transactions through the $444 million Denali Alaskan in Anchorage dating back to 2005 to fund several condominium units, according to several local media reports. To obtain the loans, the U.S. Attorney’s Office said Baker transferred property from his company, Discovery Construction, to himself and then back to his company.
After the sale back to Discovery Construction, Baker told Denali Alaskan that a $1.4 million deal went through and obtained financing from the credit union. However, he allegedly used the funds received from Denali Alaskan to reduce his shareholder debt to his construction company, according to media reports.
In another condo deal, Baker also allegedly lied to the credit union after drawing down proceeds of a $9.2 million loan for an Anchorage apartment project. He ended up defaulting on the loan, the indictment noted.
Baker was charged with 14 counts including fraud and money laundering. He is facing a maximum penalty of 30 years in prison and a $1 million fine. Both the IRS and the FBI conducted the criminal investigation against Baker.
Denali Alaskan did not respond to a request for comment.
Credit Union Times first reported on Baker in 2008, when the credit union sought $16 million in its lawsuit. Denali Alaskan said a $2.8 million loss in 2007 was attributed to Baker’s defaulted loans.