July 14, 2017
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — Former BB&T Market President Charged with Bank Fraud
Another banker is indicted for fraud, not for taking money, but for bending the rules in an attempt to bail out a borrower.
I’ve written in the past of the strong psychological need some bankers have that to help others they end enabling a borrower and getting charged with bank fraud. I need to explore this further.
Anyway, Paul Fannin’s Kentucky real estate development company was starved for cash. BB&T was wary of the company and in 2014 the bank downgraded the relationship, cutting him off from future capital.
But not his daughter. Brent loaned $250,000 to Paul’s daughter Chelsea in 2014 and 2015 that was funneled back to Paul say the Feds. The loan defaulted.
Brent took a $250,000 CD as collateral, but “Lee knew that Stone did not own this CD and that the City National Bank of West Virginia had not agreed to allow this CD to be pledged as collateral,” says the indictment.
The grand jury returned 13 fraud counts against the three co-conspirators. Each face years in prison and hundreds of thousand of dollars in restitution.