BestBank Executives Indicted

May 30, 2003
Federal agents are looking for the founder of BestBank, the Colorado bank that collapsed in 1998, leaving taxpayers to pick up the $200 milion tab.

Edward P. Mattar III, 63, and four others were indicted by a Denver grand jury last week. His last known addresses were in San Diego and Deerfield Beach, Fla. Mattar faces ten years to life in prison on charges that he made at least $5 million in a scam that bilked thousands of consumers and led to the bank's collapse. The other four defendants were taken into custody earlier this week.

BestBank worked with Century Financial of Fort Lauderdale, Fla., selling credit cards as part of a travel-club scheme aimed at consumers with poor credit histories.

Century Financial used telemarketers to contact potential customers and offered them travel-club membership. If they accepted, they were issued a BestBank credit card which was immediately hit with a $458 enrollment fee and other charges.

BestBank was closed by the Colorado Banking Examiner in July 1998. It had a portfolio of 500,000 Visa cards, at least half of which were in default.

The FDIC has written off the balances of those who paid exorbitant dues for the travel club. All accounts that were acquired by the FDIC through the failure of BestBank were cancelled as of March, 1999. Pueblo Bank and Trust. Co. acquired BestBank's assets, including some accounts not related to the travel club.

Indicted with Mattar were Jakc O. Grace Jr., 50, Hermosa Beach, Calif., former chief financial officer of the bank' Glenn M. Gallant, 45, Fort Lauderdale, co-owner of Century Financial; and Douglas R. Baetz, 52, Key West, Fla., another co-owner of Century Financial. They were arrested by the FBI in their home cities.

Besides the travel club scam, BestBank attracted customers with some of the country's best rates on certificates of deposit.

Besides taxpayers, large purchasers of CDs were big losers in the collapse. The FDIC says that depositors who had more than $100,000 in their accounts -- the maximum covered by the agency -- lost $27 million in the collapse.

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