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Mariner’s Bank, the Edgewater financial institution that often found itself at the center of scandal related to its former chairman, Fred Daibes, will sell itself to Spencer Savings Bank for an undisclosed amount later this year, the companies announced Friday.
Bank executives said in a statement that they were excited about the merger, which will create one bank that retains the Spencer name and has about $4 billion in assets.
“This opportunity brings together two community-focused companies,” José B. Guerrero, chairman and CEO of the Elmwood-Park based Spencer bank, said in the statement. “It enhances our business banking initiatives and facilitates our expansion into northern and eastern Bergen County.” The combined company will have 26 branches.
The merger still must receive regulatory approval. But it means the end of the line for Mariner’s, a state-chartered commercial bank, just two decades after Daibes founded its first branch on River Road in Edgewater in 2001.
Daibes, a developer, is perhaps best known for helping turn the once-sleepy borough on Bergen County’s eastern edge into another jewel on the Hudson River’s Gold Coast. His many construction projects include apartment complexes and towers such as the upscale St. Moritz – now called Riello – which sits atop Edgewater’s highest point and offers views all the way to Long Island.
But Daibes, who once worked as a dishwasher and bartender at Edgewater’s old Binghamton ferryboat restaurant, has also seen his share of legal trouble. And that often ensnared Mariner’s, where he served as chairman of the bank until 2011 and chairman of its parent company, Mariners Bancorp, until 2019.
It was unclear as of Friday evening if Daibes stood to profit from the sale. Representatives of both banks did not respond to a request for comment, and no one answered a phone call to Daibes’ company, Daibes Enterprises.
In October 2018, a federal grand jury indicted Daibes and Michael McManus, the chief financial officer of Daibes Enterprises, with conspiring to circumvent Mariner’s lending limits.
The indictment described a scheme in which Daibes and McManus allegedly used Daibes’ friends and relatives to secure millions of dollars in loans without the knowledge of Mariner’s Bank or the Federal Deposit Insurance Corp. between 2008 and 2013.
Daibes pleaded not guilty in November 2018 to the charges, which are still pending. He posted a $10 million bond using several Edgewater properties as collateral.
In November 2019, James Demetrakis, Daibes’ longtime associate, admitted his role in the scheme and was sentenced to two years’ probation and a $75,000 fine.
But Daibes has maintained his innocence throughout, telling The Record and NorthJersey.com in May 2019 that he’d beat the charges.
“We will be vindicated,” Daibes said in an interview. “I’m being accused of trying to defraud the bank I owned over 90 percent of.”
Daibes has been subject to or referenced in several other lawsuits regarding his construction projects. One of these was filed by a developer, 615 River Road Partners, that claimed local officials barred the company from building on a coveted River Road site facing New York City because of Daibes’ influence.
Daibes was not named in the suit. But one of the allegations claimed he maintained his influence by providing below-market rentals in his apartments, loans and credit from Mariner’s Bank and the “opportunity to purchase real property owned by Mariner’s Bank for a fraction of the fair market value.”
Both Daibes and the town denied the allegations. The two sides settled two years later when Edgewater approved a deal that allowed 615 River Road Partners to build 1,200 units.
Palisades Park suit
More recently, the borough of Palisades Park announced it was suing Mariner’s Bank to recoup hundreds of thousands of dollars it lost during a cyberattack on the borough’s computer systems.
The March 2020 suit claimed Mariner’s failed to provide reasonable security procedures, among other things. It seeks full repayment of about $500,000, as well as compensatory damages and legal fees.
The lawsuit’s status was unclear Friday evening.
In 2012, state and federal regulators also ordered the bank to address a range of financial safety and soundness concerns, including issues with asset quality, internal controls and deals with insiders. The enforcement actions ended two years later.
And in 2013, James Cockinos, Mariner’s former CEO, was sentenced to a year in prison and ordered to pay more than $500,000 in restitution after admitting that he’d conspired to commit bank fraud.
Cockinos had been owner and president of Federated Mortgage Co. of America and a member of the board of Mariner’s Bank in 2007 when he misstated a client’s income and assets to secure a mortgage from Washington Mutual for a $1.9 million home in Englewood Cliffs, authorities said.
He later became Mariner’s CEO, but left the post in 2009.
This report contains material from the Associated Press.
Steve Janoski covers law enforcement for NorthJersey.com. For unlimited access to the most important news about those who safeguard your local community, please subscribe or activate your digital account today.
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