THOUSAND OAKS : Trial Begins in Bank Fraud Case

A federal bank fraud trial of two officers of a defunct Thousand Oaks bank, accused of lying to the Federal Deposit Insurance Corp. to keep their troubled financial institution open, will begin with opening statements today.

On Wednesday, a jury was seated in the case against Phillip L. Chase, 51, of Thousand Oaks, and Olen B. Phillips, 53, of Oak View. The two men have pleaded not guilty to charges that they made false statements to the FDIC, misused bank funds and made false entries on bank records.

A federal grand jury indicted the pair in May, charging them with trying to keep regulators from seizing the United Community Bank of Thousand Oaks by loaning $300,000 to themselves through “straw borrowers,” who then allegedly re-loaned the money to the two bank officers for the purpose of buying more stock.

Before the jury was picked, Richard Marmaro, Chase’s attorney, told U.S. District Court Judge William D. Keller that his client’s defense would center on ignorance of federal banking rules.

Marmaro, who had been asked by the judge to provide a brief overview of Chase’s defense strategy, said Chase isn’t a professional banker by trade and had no idea that money borrowed from a bank could not be used to purchase stock in that same bank.

Had Chase known about such laws, Marmaro said, “he would have gone down the street to Bank of America” to get the loan.

A federal grand jury initially charged Chase with 10 criminal counts and Phillips with nine. U.S. Atty. Brent Whittlesey said some of the charges had been dropped because of lack of proof. Phillips now faces seven counts and Chases faces eight, he said.