August 17, 2018
By Dominic J Bartolone
Contributing Editor, Fraud Friday
Fraud Friday — BB&T Exec to do 18 Months for Bank Fraud
By all accounts from friends and family, Brent Lee, Market President of BB&T and Deacon of First Baptist Church of Pikeville, KY, was a pillar of the community.
Those positive letters may have resonated with U.S. District Judge Karen Caldwell, who sentenced Lee to 18 months in federal prison, plus five years of supervised probation, far less than the 30-year maximum sentence.
Lee was also ordered to pay $248,000 in restitution to Branch Banking & Trust for the amount of money lost on fraudulent bank loans.
A jury convicted Lee in February of nine charges, including conspiracy to commit bank fraud, aiding and abetting bank fraud, misapplication of bank funds, and making unauthorized representations by a bank employee.
Lee, while Market President for BB&T in 2014, conspired with Paul Fannin, a residential developer, and his daughter, Chelsea Stone, to commit bank fraud through straw loans.
Fannin was an existing customer of the bank, having taken out a $950,000 loan for the development of an 8-unit townhome project called Stone Crest Properties.
When the bank became concerned that the project was not progressing as planned, they put a hold on authorizing any further financing for Fannin until he followed specific bank protocols and procedures.
Rather than follow BB&T rules, Lee suggested to Fannin that they use his daughter, Stone, as a straw borrower, with the loan proceeds being funneled to Fannin.
According to court documents, Lee misrepresented to the bank that Stone was obtaining a commercial loan to expand her embroidery business, knowing full well that she owned no such company.
The check for the loan proceeds was deposited directly in Fannin’s account, where he used the borrowed funds to pay off existing loans, and according to prosecutors, spent more than $120,000 of that cash in casinos, including $100,000 lost in one night.
For their part in the scheme, Fannin was sentenced to one day of time served, and Stone was granted a pretrial diversion, allowing her to avoid jail time.
Letters from family members say Brent Lee was merely trying to help Fannin with this real estate business, never believing his actions were illegal.
However, prosecutors painted a different picture of Lee because of the role he played in the scam, contending he was an insider who devised and presented the steps necessary to undertake the fraudulent loan scheme.
Brent Lee did not pocket one dime from the fraud.
Read our previous reporting.