Chicago bank to overhaul operations after risky loans to Trump's former campaign manager

CHICAGO (WLS) -- In July, Chicago bank mogul Stephen Calk was convicted of financial institution bribery after handing high-risk loans to Donald Trump's former campaign manager Paul Manafort. Although Calk denied it, the $16 million deals by his Federal Savings Bank, headquartered on the Near West Side, were part of a plan to land him a top White House appointment.

He liked Secretary of the Army or maybe an ambassadorship somewhere, according to the evidence.

Calk has not been sentenced on that federal conviction yet, but this punishment for the bank he founded and ran has come down. Officially, it is an enforcement action by the U.S Comptroller of the Currency.

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Regulators say they "found unsafe or unsound practices" at Federal Savings Bank, including those relating to "risk management; the Bank's consumer compliance program and violations of law, rule, or regulation," citing real estate settlements, truth in lending and the Bank Secrecy Act.

The slam at the bank in Chicago's Fulton Market neighborhood follow loans to Manafort that went sour with the bank eating $12 million after Manafort was convicted and imprisoned for other crimes, despite being eventually pardoned by his friend and former boss, President Trump.

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In a statement provided to the I-Team, Calk's brother John, the current bank chairman and CEO, states, "As The Federal Savings Bank continues to experience significant business growth, we have been working closely with the Office of the Comptroller of the Currency to upgrade our policies and procedures. These enhancements have and will make the bank even stronger as we help our customers achieve the American dream of homeownership."

In the criminal case, Calk's attorneys have now filed a motion claiming prosecutors failed to prove the allegations, and they've asked Judge Lorna Schofield to override the jury's decision and acquit him. No decision has been made yet on that, however, his sentencing has been pushed to February 7. Calk faces possible prison time of up to 35 years.