Developer pleads not guilty

Listen to this article

Developer John R. Steffen pleaded not guilty of bank fraud Wednesday in federal court.

Steffen, who headed the now-defunct Pyramid Construction Inc., was arraigned before U.S. Magistrate Judge Mary Ann Medler in St. Louis. Brian Witherspoon represented Steffen at the hearing.

An evidence hearing is scheduled for 9:30 a.m. Sept. 9. Steffen is out on bond.

The federal government announced Steffen’s indictment last Friday.

The indictment alleges Steffen used collateral from a loan intended for the Metropolitan Building in the Grand Center arts district to pay for other projects’ operating expenses.

Steffen allegedly received more than $1.4 million in tax credits from the state for rehabbing the building in 2007.

Steffen then used the credits as collateral for a $1.1 million loan from The Business Bank of St. Louis.

In December 2007, however, Steffen sold nearly $830,000 worth of the credits and then used more than $700,000 to cover operating expenses on other projects, claims the indictment.

If Steffen is convicted, he could face up to 30 years in prison and fines of up to $1 million, according to a U.S. Attorney’s Office press release.

Another civil suit was filed by Midland Funding against Steffen in St. Louis County on Aug. 3.

The federal indictment is United States of America v. John R. Steffen, 4:10-CR-00371-JCH.