December 23, 2016
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — Two More Community Bankers Charged with Bank Fraud
For borrowing $7.5 million from the Troubled Asset Relief Program after cooking Florida-based GulfSouth Private Bank’s books.
Says the Special Inspector General for TARP.
Former CEO Anthony J. Atkins, 51 and Vice President Samuel D. Cobb, 37 were arraigned last week on seven counts of fraud.
Their trial is scheduled for February 6th.
Also indicted is Bruce Houle, 57 a borrower who allegedly helped the bank conceal non-performing loans.
The Feds say the problem is the new loans of $3.8 million were non-recourse and were simply a sham to clean up the portfolio.
“As a part of the scheme, Atkins and Cobb caused U.S. Department of Housing and Urban Development Settlement Statement, Form HUD-1s to be prepared in connection with the loans issued by GulfSouth to Houle (and others).
“The HUD-1s falsely stated that the men provided cash for their respective transactions, but the amounts listed as “cash from borrower” on the HUD-1s was actually money provided by GulfSouth.
“Further, according to the indictment, Atkins, Cobb, Houle (and others) submitted fraudulent security agreements that falsely represented that (the borrowers) were obligated to repay their respective loans.
“As a result of the scheme, it appeared that the loans were performing.”
The properties were soon sold on a short sale at a loss to GulfSouth.
“I believe many of these allegations, if not all of them, are going to be an effort by the government to find criminal liability for what might be otherwise unsafe banking practices, but not conduct evidencing intent to commit bank fraud,” The former CEO’s attorney says.