Gregory William Bell, a senior executive at the failed New Frontier Bank in Greeley, has been charged with fraud and money laundering, the U.S. Attorney’s Office said Tuesday.

Bell, 54, faces one count each of false bank entries, misapplication, bank fraud and money laundering. Prosecutors said Bell, who was New Frontier’s senior vice president and chief lending officer, has agreed to plead guilty.

State regulators shut down New Frontier in April 2009, as worried depositors withdrew funds, and appointed the Federal Deposit Insurance Corp. as its receiver. The $1 billion failure was the costliest bank failure in Colorado history and caused havoc in the agriculture and real-estate communities of northern Colorado.

A Denver Post investigation into New Frontier’s collapse found that practices at the bank violated banking standards and, in some cases, rose to the level of potential fraud. Some of those practices are outlined in federal prosecutors’ case announced Tuesday.

Prosecutors said that from June 2008 to September 2008, after state and federal regulators had directed New Frontier to raise capital, Bell arranged for eight bank customers to borrow money from the bank and use the proceeds to purchase shares of bank stock. That allowed New Frontier to appear to improve its capital position.

The bank loaned $20.14 million to the eight borrowers, who bought bank shares with $4.3 million, prosecutors said. In August 2008, according to the government’s case, Bell arranged for $260,000 of the proceeds of one of the loans to be transferred to the account of the borrower of the loan.

Also according to the government, in October 2005 Bell made false entries into a credit-approval form for a $5.58 million loan to two borrowers. He failed to disclose that a $106,759 certificate of deposit that the borrowers pledged as collateral actually belonged to someone else, prosecutors said. Bell personally benefited as a result of the loan, they said.

Prosecutors also alleged that in March 2008, Bell willfully misapplied $662,045 of New Frontier’s funds and that in June 2008 he deposited $160,000 into his account to conceal ownership of the money.

The charges carry penalties of up to 30 years in prison.

The false bank entries, misapplication and bank fraud counts each carry a penalty of up to 30 years in prison. The money laundering count carries a penalty of up to 20 years in prison.

Bell has been released on a personal recognizance bond. He is scheduled to appear for a hearing before U.S. District Judge Lewis Babcock on Feb. 5.

Three months before New Frontier failed, the FDIC ordered the bank to replace Bell and Larry Seastrom, its longtime president and founder.

The FDIC in late 2010 barred Seastrom, Bell and New Frontier’s board of directors from running a financial institution.

Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or twitter.com/howardpankratz