Friday – Sentence handed down for 3 Florida Community Bankers
September 5, 2014
By Bob Coleman
Editor, Coleman Report
“What we had was three people who had all the benefits this world had to offer and yet they decided to steal from the federal government. This will resonate. Whether you are a banker or a lawyer — when you lie, cheat and steal — you will be punished.”
That is how the Assistant US Attorney characterized the former CEO, CFO and attorney of Coastal Community Bank that was closed by the regulators in 2010.
CEO Terry Dubose received four years. The CFO got three years and the bank’s attorney and the bank’s second largest shareholder will serve four years in jail.
The crime? Coastal Community Bank had a $3,000,000 loan with RBC Bank which was secured by 100% of the stock of Coastal Community Bank and Bayside Savings Bank.
At that time, the RBC Loan was in default, thus giving RBC the ability to exercise its right to take the pledged stock that secured the loan and take over Coastal Community Bank and Bayside Savings Bank.
Under pressure from RBC to repay this debt, the defendants falsely certified to the FDIC that the RBC Loan was unsecured, knowing for a fact that it was instead a secured loan, so that Coastal could get an FDIC-guaranteed loan under the TLGP – Temporary Liquidity Guarantee Program.
Coastal obtained a $3,750,000 loan from central Florida-based CenterState Bank.
In June 2010, Coastal defaulted on the TLGP Loan, and CenterState Bank subsequently filed a claim with the FDIC for payment of the full amount due on the TLGP Loan, plus interest.
“This kind of fraud committed by bank insiders against programs designed to help our citizens will not be tolerated. Not only is such conduct a breach of trust, it is harmful to our communities and our nation. These significant sentences today provide a strong message to those working in the banking industry that insider fraud, deception, and greed will be met with firm justice,” say the feds.