Fraud Friday – Community Banker gets Five Years for Loan Fraud

September 19, 2014

By Bob Coleman
Editor, Coleman Reporot

prison032013-2He started out as an intern for the 109 year-old First State Bank, and rose to the level of vice president of commercial lending. 34 year-old Jackie Cantley remained in the West Virginia community he grew up in, got a BA at Marshall University and then the MBA. Jackie joined the Rotary Club and was active in numerous civic groups helping the underprivileged and homeless. Definitely a rising star in the community and the bank.

But Jackie Cantley’s next gig will be five years at a minimum security level federal prison.

Jackie’s crime? He pled guilty to the following earlier this year:

1. Approved a $335,000 loan to his cousin, greater than his $250,000 loan limit.
2. Approved the loan without sufficient collateral, without a loan application, tax returns and financial statements, “knowing the borrower was not credit-worthy for the loan.”
3. Forged borrower signatures on loan documents.
4. Transferred funds to other accounts without authorization.
5. Approved multiple loans to another borrower totaling over $1 million, again without documentation such as tax returns, financial statements, guarantor information.
6. Failed to perform a cash-flow analysis and obtain sufficient collateral “knowing the borrower was not credit-worthy for the loan.”

Reports the Herald-Dispatch

Bank president Sam Vallandingham minced few words Monday in illustrating Cantley’s impact upon the 109-year, family institution. He told U.S. District Judge Robert C. Chambers and the near-capacity courtroom that bank officials became “gut-wrenchingly devastated to learn of (Cantley’s) despicable criminal conduct.”

“While Mr. Cantley learns his fate (Monday), the First State Bank continues to find it necessary to manage the damage he has caused,” he told the court. “Rather than a catastrophic economic event, it was the actions of just one man who ruined the unblemished history of profitability.”

A federal judge showed little mercy Monday in punishing the former vice president of First State Bank, describing the defendant’s million-dollar loan scheme as a “sophisticated theft” carried out for “greedy purposes.”

The judge further described himself as dissatisfied, calling Jackie Cantley’s level of remorse and explanation inadequate, and the defendant’s claim that he didn’t benefit from the $1.42-million theft “preposterous.”

Read about his sentencing here.