April 16, 2021
Fraud Friday – Former Community First VP Charged with Loan Fraud and Arson
Former Vice President of Community First Bank of the Heartland, Richard B. Pigg, has been arrested for allegedly monetizing fraudulent commercial real estate loans by burning down his investment properties to collect insurance.
According to the indictment, in May 2011 Pigg convinced several bank customers to purchase real estate on his behalf through mortgage loans financed at Community First Bank. These customers were lead to believe that Pigg had a property manager who would bring in renters, collect rent money, and maintain the property. Pigg also allegedly told them that he would cover insurance costs and real estate taxes.
Once Pigg convinced a number bank customers to purchase real estate on his behalf, he allegedly originated and approved loan paperwork for the rentals without disclosing the true nature of his relationship with the customers or his ownership interest in the properties to Community First.
Pigg then allegedly increased the financed amount of money on the loans by thousands of dollars to show excess loan process or cash made payable to the customers. However, instead of returning the excess amount, he kept the cashier’s check and deposited it into his own personal account at People’s National Bank.
After loan funds were disbursed, Pigg allegedly arranged to have fires set to destroy the mortgaged properties so he could collect the insurance money.
Pigg was arrested in Texas on March 4, 2021. Shortly after his arrest, he had his first appearance in court and plead not guilty to all charges. He has been released on bond pending his trial, which is currently set for May 10, 2021.