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Press Release

Former Bank CEO Sentenced To Prison For Falsifying Bank Records, Misappropriating More Than $1.6 Million

For Immediate Release
U.S. Attorney's Office, District of Minnesota

Acting United States Attorney W. Anders Folk today announced the sentencing of ROBERT JOHN HAGER, 70, a former bank CEO, to 18 months in prison for making a false entry in bank records. HAGER, who pleaded guilty on May 18, 2020, was sentenced earlier today by Judge Patrick J. Schiltz in U.S. District Court.

According to the defendant’s guilty plea and documents filed with the court, HAGER was the CEO of Border State Bank (“Border”) and served as a director of the bank’s holding company, Border Bancshares, Inc. HAGER also held various executive positions in banks that Border Bancshares, Inc. acquired, including the former First State Bank of Clearbrook and the former First Advantage Bank. In late 2015 and early 2016, HAGER loaned money to a bank customer to invest in a diamond and gold venture in Liberia, Ghana, and Kenya that promised a quick return. After he depleted his own personal funds on the investment and maxed out the amount he could borrow from the bank, HAGER asked other individuals, including bank customers, shareholders, and directors of the bank to lend him money, which would enable HAGER to recover his personal funds.

According to the defendant’s guilty plea and documents filed with the court, between 2016 and 2017, HAGER requested a series of loans by having Border bank customers take out loans in their own names, or draw from loans they already had, and then transfer the funds to HAGER. In May 2016, HAGER issued three unauthorized Standby Letters of Credit (SBLCs) worth $1.6 million to facilitate the purchase and delivery of diamonds and gold from Africa. In each instance, Hager issued the SBLC on the letterhead of First Advantage Bank and signed the letter as CEO of First Advantage. Letters of Credit are considered obligations of a bank, and they can impact a bank’s financial standing.  Such obligations must be entered into the bank’s general ledger so that they can be accounted for and tracked by regulators. In order to conceal his actions, HAGER failed to report the SBLCs to bank personnel so that they could be logged into the bank’s system.

This case was the result of an investigation conducted by the Office of Inspector General for the Federal Reserve Board, the Office of Inspector General for the Federal Deposit Insurance Corporation (FDIC), and the FBI.

This case was prosecuted by Assistant U.S. Attorney Amber M. Brennan.

Defendant Information:                                                                                                    


Greenbush, Minn.


  • Making false entries in bank records, 1 count


  • 18 months in prison
  • Two years of supervised release




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United States Attorney’s Office, District of Minnesota: (612) 664-5600


Updated March 2, 2021

Financial Fraud