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Mug Shot Monday — Chief Credit Officer Gets 4 Years for $900,000 in Bribes

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December 22, 2014

By Bob Coleman
Editor, Coleman Report Afternoon Brief

briefcase“After the financial crisis we experienced, no one can legitimately question the importance of pursuing people like Mr. Malone, who commit bank fraud,” says United States Attorney Michael J. Moore.

In addition to four years in prison, Larry was ordered to pay $25 million in restitution.

Malone was employed as the Chief Lending Officer with Southwest Georgia Farm Credit for over eight of his 20 years with the lender.

Here’s his legacy:

In 2008, Borrower A borrowed $5 million. Borrower A was a real estate developer, primarily in North Florida. Borrower A never paid any principal back to the SWGFC. Instead, the loans were continually rolled over while more new loans were being made. Thus, one loan was used to pay off another. Borrower A made a total of approximately $250,000 in bribes, kickbacks or gifts to Malone, or to a family member of Malone, always with the loan proceeds which Borrower A had just received. In 2005, Malone, made a loan for $156,000 to Borrower A. Borrower A paid a relative of defendant Larry Malone the sum of $70,000.

Borrower A reached his $5 million borrowing limit at SWGFC in 2006. Thereafter, his father, Borrower B, became the straw borrower on behalf of his son in the approximate amount of an additional $5,000,000.00. Borrower B passed the loans proceeds directly to Borrower A. Borrower B had no intention to repay the $5 million he borrowed, and has never repaid the loans. Borrower B simply acted as a conduit to funnel more SWGFC monies to Borrower A. Borrower A paid Malone $35,000.

Borrower C, uncle of Borrower A, also acted as a straw borrower at SWGFC on Borrower A’s behalf. In 2006, Larry Malone lent $735,000 to Borrower C, who then transferred $135,000.00 of the loan proceeds to Borrower A.

Borrower D is a long-time family friend of Borrower B. When Borrower B exhausted his $5,000,000.00 borrowing limit at SWGFC, he recruited Bonower D to take approximately $800,000 in straw loans for the benefit of Borrower A. However, Borrower D kept about $100,000 of the loan proceeds for himself and used the same to purchase a house for himself in Sylvester, Georgia.

Borrower E was a long-time customer of SWGFC. During the conspiracy Borrower E obtained loans and made numerous kickbacks to defendant Malone and Malone’ s family members. In 2008 Malone made a loan for $300,000 to Borrower E. Borrower E paid a relative of Malone $100,000.00.

Borrower F was also a long-time customer of SWGFC. During the conspiracy, Borrower F obtained loans and made kickbacks to defendant Malone. In 2008 Malone made a loan for $200,000 to Borrower F. On the same date, Bonower F paid defendant Larry Malone the sum of $25,000.

Read my reporting last July about Borrowers A and B.

Read the Plea Agreement 

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