After a long-shot, five-year struggle against the U.S. Department of Justice, former Lake Oswego bank executives Dan Heine and Diana Yates won a stunning victory on Friday.

A panel of federal appeals court judges vacated their convictions on conspiracy to commit fraud and making false bank entries. Heine and Yates, formerly the two top executives at Bank of Owego, were indicted in 2017 and accused of engineering several plots to hide problem assets or otherwise to make the bank look stronger than it was.

After a marathon 29-day trial, a jury found them guilty on 13 counts each. Heine was sentenced to 24 months, Yates to 18 months.

Both Heine and Yates insisted they’d done no wrong and appealed. Four years later, they’ve succeeded.

“We are gratified that the 9th circuit vacated all convictions against Dan Heine and determined that most of the government’s theories did not even amount to criminal violations,” said Steve Sady, a federal public defender in Portland. “Mr. Heine, who is 75 years old and spent his work life as a respectable banker, had confidence that he would be vindicated on appeal. He looks forward to putting this difficult time behind him.”

The case was remanded to the U.S. District Court and Judge Michael Simon. Federal prosecutors will decide whether to launch a second prosecution on the few counts the appeals court did not throw out.

Heine led the effort to establish the bank in 2004. Sharply dressed with a shock of white hair, he looked the part…

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