Fraud Friday – “Jekyll and Hyde” Former Bank VP & Loan Officer Sentenced to 12 Years

October 27, 2023

Delaney Sexton
Contributing Editor

Fraud Friday – “Jekyll and Hyde” Former Bank VP & Loan Officer Sentenced to 12 Years

“For more than half a decade, Richard Pigg abused his position of trust to defraud his bank, take advantage of his customers and skim money off of inflated loans,” says U.S. Attorney Rachelle Aud Crowe. “When his financial schemes unraveled, he burned the houses to use insurance money in an attempt to cover the loans. For this pattern of fraud and fire that financially ruined his victims, put innocent lives at risk and injured a first responder, Richard Pigg is fully deserving of 12 years in federal prison.”

As described by the U.S. Attorney’s Office, the sentencing judge of Richard Pigg’s case said that “this was like a man who robs a bank, gives some of the money to a homeless shelter, then burns the homeless shelter down and wants credit for donating to the homeless shelter.” Pigg relied on letters supporting his good works, but that did not change the judge’s view that Pigg was a “Jekyll and Hyde” type.

Pigg served as the Vice President and Loan Officer at First Community Bank of the Heartland in Mount Vernon where he defrauded the bank of more than $600,000 to purchase investment properties and pay personal expenses. As the bank’s VP, he convinced bank customers to buy rental properties on his behalf through mortgage loans at the bank. He made sure to conceal his personal financial interest from the bank as he facilitated the loans.

Pigg reassured the victims that he would handle other aspects of the rental properties such as securing tenants, collecting rent, and maintaining the properties. Further taking advantage of the situation, he increased the amount financed in the mortgage loan by thousands of dollars above the purchase price without the victims’ consent. With the excess loan proceeds, he directed money to his own accounts to pay his personal debts.

Loan fraud was not the end of Pigg’s criminal career. He also burned multiple properties. One property was a four-unit rental apartment complex that he set fire to in January 2016 after renewing one insurance policy less than two weeks after taking out a second insurance policy on the property. Another property was burned twice since the first arson attempt in January 2016, which only partially damaged the property. One month later, he burned the property for a second time, this time causing a total loss. The insurance benefits were used to pay off the mortgage loan.

Pleading guilty in April to six counts of bank fraud and three counts of arson, Richard Pigg now received a prison sentence of 12 years for his criminal conduct while working at Community First Bank of the Heartland in Mount Vernon. The court is requiring Pigg to serve at least 85% of his prison sentence, which means at minimum, he will be imprisoned for more than 10 years.

“As the sentence imposed in this case clearly indicates, the investigation and prosecution of crimes of arson remains a priority for ATF and the United States Attorney. The criminal use of fire, whether to conceal crime, intimidate, or defraud others, places lives and property at great risk and endangers those who selflessly respond, day or night or extinguish the flames,” says Bernard Hansen, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Kansas City Field Division.

U.S. Attorney’s Office Press Release

Read our previous reporting:
Fraud Friday – Former Bank VP Pleads Guilty to $600,000 Loan Fraud and Arson – 5/19/23