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Testimony: McDonnell filed false loan documents

Joey Matthews | 8/15/2014, 2:08 p.m.

It may be the most damning evidence against former Gov. Bob McDonnell.

Prosecutors unveiled it this week as they prepared to wrap up their federal corruption case against the former state chief executive and his wife, Maureen, and allow the McDonnells to present their defense.

The 12-member federal jury heard evidence Mr. McDonnell deliberately made false statements when he applied for a bank loan to try and save a failing real estate partnership he owned with his sister.

Prosecutors showed the jury documents they say prove the personal financial statement Mr. McDonnell submitted in 2012 with the loan application knowingly failed to list any loans he received from the prosecution’s star witness, Jonnie Williams, who was seeking then Gov. McDonnell’s help to market a diet supplement.

By that time, Mr. Williams had given the McDonnells checks for two $50,000 loans.

One was made out to Maureen McDonnell in 2011, a loan she later used to purchase $30,000 worth of stock in Star Scientific, Mr. Williams’ company and manufacturer of the supplement Anatabloc that he was touting as a cure for Alzheimer’s disease and cancer.

The second loan was made out to the real estate partnership named MoBo, which Mr. McDonnell formed with his sister, Maureen McDonnell, to manage two Virginia Beach properties they owned.

Prosecutors called Virginia Beach Mayor William Sessoms Jr., a longtime friend and supporter of Mr. McDonnell, to the stand Tuesday to buttress the charge.

The mayor also is president of the Towne Financial Services Group that holds a $722,550 mortgage on one of the two Virginia Beach properties.

Prosecutors showed Mayor Sessoms a copy of a personal financial statement the governor filled out seeking to refinance the hefty mortgage.

The mayor testified the statement failed to include loans from Mr. Williams or Starwood Trust, the entity through which Mr. Williams had funded loans to the McDonnells.

The statement bolstered the prosecutors’ claim to jurors that Mr. McDonnell committed a federal crime by filing the false financial documents with the federally insured Towne Banke in October 2012. Essentially, the statement understated Mr. McDonnell’s level of debt.

The defense is expected to begin calling witnesses Monday. Mr. McDonnell is expected to be among those who testify.