Fraud Friday – Loan Officer who Approved Loans Above his Authority Pleads Guilty
February 21, 2014
By Bob Coleman
Editor, Coleman Report
Another community banker is going to jail. Not for lining his pockets, but for being a sloppy banker.
Our perp had a $250,000 loan approval limit.
Says the government in the plea agreement filed Wednesday, “Further, to authorize loans, Bank policies and procedures and sound banking practices required that Cantley determine that a loan applicant was credit-worthy, had sufficient collateral and was of good character. This in turn entailed that Cantley obtain documents such as tax returns, personal and business financial statements (including bank statements and wage statements, guarantor information, credit reports, cash-flow analyses, appraisals, promissory notes, and deed of trust that would establish that a loan applicant was credit-worthy, had sufficient collateral and was of good character in order to receive a Bank loan.”
West Virginia banker Jackie Cantley’s crime?
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.”
7. Did the same thing on another $350,000 loan