stickyimage

Fraud Friday — Community Bank CEO Indicted for Renewing Delinquent Loans

February 13, 2015

By Bob Coleman
Editor, Fraud Friday

A former Tifton Banking Company President & CEO was indicted yesterday on seven counts of bank fraud.

Gary Hall, Jr. was allegedly engaged in a long running scheme to mislead the bank and its loan committee about loans TBC made to local individuals and businesses. As part of the scheme, Hall allegedly hid past due loans from the FDIC and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking. Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.

Hall also allegedly hid his personal and business interests in at least two of the transactions over which he exercised approval authority. For example, in one instance, Hall allegedly approved several loans to the buyer of his condominium in Panama City Beach, Florida. In doing so, Hall allegedly made several false representations about the loans to TBC’s loan committee, and failed to disclose his personal interest in the transaction.

When the buyer’s loan payments became delinquent, Hall allegedly hid the loans from both the FDIC and state regulators. Hall allegedly received $50,000 from the sale of his condominium in this transaction, which was allegedly funded in full by an unsecured loan to the buyer approved by Hall. The buyer eventually declared bankruptcy resulting in a loss of more than $400,000 to TBC.

TBC was closed by the Georgia Department of Banking and Finance in November 2010 due to its poor financial condition. At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program.

3 years ago by in . You can follow any responses to this entry through the | RSS feed. You can leave a response, or trackback from your own site.