October 18, 2019
By Caity Witucki
Contributing Editor, Fraud Daily
Fraud Friday– Former Aledo bank executive pleads guilty to fraud
Last week, former executive vice president and chief loan officer for the failed Country Bank of Aledo, Dana Frye, pleaded guilty to charges of making false statements to the bank. During his appearance in federal court, Frye admitted to using his position at the bank to make loans to entities in which he held a personal financial interest.
According to the Department of Justice, Frye served as executive vice president and chief lending officer for Country Bank from 2000 until 2010. During that time, Frye also held a financial interest in multiple real estate developments including a golf course and several residential lots. Additionally, Frye and his son owned a company, known as Webgem, Inc., which provided accounting and other services to Frye’s real estate developments.
At his hearing on October 10, 2019, Frye admitted that he conspired with others to convince Country Bank’s board of directors to make over $20 million in loans to his real estate developments. Additionally, Frye failed to disclose that Webgem was going to be paid $480k from the proceeds of the bank loans.
In May 2009, Country Bank received $4.1 million in aid through the Department of Treasury’s Troubled Asset Relief Program, known as TARP. In October 2011, The Illinois Department of Financial and Professional Regulation’s Division of Banking closed Country Bank and appointed the FDIC as receiver. The FDIC covered the bank’s losses in excess of $70 million. That same year, Frye’s real estate development went into foreclosure leaving $12.4 million in outstanding loans and 96 liens on the property.
Frye’s hearing for sentencing is scheduled for February 26, 2020. He is facing a maximum sentence of five years along with payment of restitution.