James Dwyer, the former owner of the White Sands hotel has been indicted in the US on charges he lied to bankers when he applied for a $16 million construction loan.

The New Jersey property developer who owned the White Sands property from 1998 until last year, pleaded guilty on Wednesday to the charge and was released on $150,000 bail.

The Philadelphia Inquirer reported that Mr. Dwyer, 61, was arraigned in federal court in Camden, New Jersey.

The newspaper said the grand jury charged that Dwyer diverted a "significant amount" of a $16 million loan from National Penn Bank that he had pledged to apply towards development of an office park in Linwood, Atlantic County. Dwyer is accused of using the money for other real estate projects.

The indictment did not identify the other projects, but according to federal bankruptcy records, Mr. Dwyer's company diverted $3 million from the Linwood loan to finance the $8 million purchase of the Packard Building at 15th and Chestnut Streets in Philadelphia in 2000.

He sold the building a year later for $12 million.

When Dwyer filed for Chapter 7 bankruptcy in December 2001, he listed $54 million in debt, said his bankruptcy lawyer, David A. Kasen of Cherry Hill, who said he did not know the amount of the assets. In addition to his real estate investments in Philadelphia and at the Jersey Shore, Dwyer owns a hotel complex called the White Sands in Bermuda, Kasen claimed. In fact, Mr. Dwyer lost control of White Sands last year when his Bermuda companies were wound up at the request of the Bank of Butterfield after Mr. Dwyer failed to keep up with loan payments.

Last month, Bermudian developer Jeffrey Amaral bought the property and hoped to re-open it for the summer season.

But Mr. Dwyer is unlikely to see any of the proceeds of the sale. If the bank gets its money back from the sale of the hotel, anything additional will be passed on to the liquidator - the Registrar General - to pay off the other creditors. Government issued a writ against the hotel this week for $187,291 in unpaid hotel occupancy tax, land tax and payroll tax. And former staff at the hotel were not paid from December, 2001 until March, 2002. But Mr. Kasen said of Mr. Dwyer: "He's been around for a long time and done very well. He's very well-respected in the community and has done a lot of charitable things. He's really a very nice guy."

Mr. Kasen said Mr. Dwyer's financial troubles were caused by a former business associate who has since died. The grand jury's indictment also alleges that Mr. Dwyer provided misleading documents about the pending sale of several condominiums and furnished the bank inflated federal income-tax statements for at least two years. Mr. Dwyer overstated his income by $2 million in 1997 and $6 million in 1998, according to the indictment.