Fraud Friday – Bank President Pleads Guilty, Agrees to Testify Against Borrowers
February 28, 2014
By Bob Coleman
Editor, Coleman Report
Fraud Friday – Bank President Pleads Guilty, Agrees to Testify Against Borrowers
I’ll run a two part series about disgraced Oklahoma community bank president Dub Moore. Moore’s First National Bank was seized by the feds in 2011 and there are three indictments arising from the closure, the banker, and two borrowers.
The big twist is you have the banker agreeing to testify against his borrowers, as opposed to the usual cooperation prosecutors receive from borrowers against their bankers, but I digress.
Earlier this week, Dub plead guilty to one count of bank fraud. In return for a lenient sentence, we guess, he agreed to testify for the prosecution.
Here is what the government alleges.
Back in 2009, a Mr. Garrett applied for a $3.4 million USDA b&I loan with an 80% federal government guaranty. The bank’s legal lending limit was $1.2 million.
That would have been fine, except Garrett, the owner of several tourist properties including Arbuckle Wilderness Center Park, an exotic animal park, had already maxed out his borrowings at the bank.
So, they got a straw man to borrow $480,000 in November 2009 that went to Garrett’s account.
USDA approved the loan. Unfortunately Dub certified there had been “no adverse changed in the borrower’s financial condition,” and neglected to tell the USDA about the $480,000 loan.
The straw man was paid off when the b&i loan funded in January 2010. But, fraud had been committed by circumventing the bank’s legal limit, so sayeth the Assistant United States Attorney.