January 31, 2014
By Bob Coleman
Editor, Coleman Report
A community bank borrower had reached its legal lending limit with Wisconsin-based Community Bank & Trust.
Trying to help the borrower, the bank president exercised very poor judgment, and bank fraud, by asking other bank customers to draw down on their lines of credit to pay the delinquency.
From the plea agreement, “In December 2010, knowing the bank’s board of directors would not authorize any further loans for [Moraine Partners, bank president David Langmak] began to ask other customers to provide funds for MP and their businesses.
“Initially Langemak approached S.S., a bank advisory committee board member who was also President & COO of KNA, a German company with an office in Plymouth, Wisconsin.
“Langemak sought to borrow $145,000 from the KNA line of credit and deposited the funds into the MP account. As Langemak had promised, the funds were returned to the KNA line of credit after MP received an infusion of cash from an unrelated, legitimate source.
“However, thereafter, Langemak made unauthorized withdrawals from the accounts of various bank customers including the $39,000 withdrawal charged in count 3 of the indictment for the benefit of MP.”
Our ex-bank prez plead guilty to count 3, and the remaining 17 counts were dropped.
His sentence for moving other people’s money around? Thirty days in jail and three years of supervised release – and a new line of work.