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Fraud Friday — Another Community Bank CEO Indicted on 14 Counts of Bank Fraud

February 26, 2016

By Bob Coleman
Editor, Fraud Friday

Fraud Friday — Another Community Bank CEO Indicted on 14 Counts of Bank Fraud

Viewing “The Big Short” the other day, the movie reinforces the fact only one Wall Street banker — from Credit Suisse — has been jailed in connection with the Wall Street mortgage securitization fraud before the Great Recession.

Ends the movie, “When the dust settled from the collapse, $5 trillion dollars in pension money, real estate value, 401k, savings, and bonds had disappeared. 8 million people lost their jobs, 6 million lost their homes, and that was just in the USA.”

So who do the feds target as the cause of the fraud?

Former Attorney General Eric Holder acknowledged the “too big to jail” issue.

So, C-Suite community bankers and small business loan borrowers have the bullseye on their backs.

Mark Warne, CEO of Indiana-based Community State Bank joins the list.

Warne was indicted last week on 10 counts of loan fraud and four counts of identify theft from funding $6 million in fraudulent loans “to support his lifestyle.”

Warne used the money to, among other things, buy show cattle and vehicles, make property improvements and repay earlier fake loans, the indictment alleges.

The indictment also says Warne concealed the loans from bank board members by creating two sets of minutes for the meetings of the board of directors, one for the bank’s board of directors to read and approve and second for the FDIC examiners to review.

While the minutes shown to the FDIC examiners made it appear as if the bank’s board of directors was aware of the loans, the actual board minutes made no mention of the loans.

Warne served as President of Community State Bank from 2010 to 2015.

Warne’s employment with Community State Bank ended after his scheme to defraud the bank was uncovered.

Mark faces the obligatory hundreds of years in jail and millions of dollars in fines.

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