January 21, 2013
We see all too many of these stories lately. A cozy relationship with a borrower induces the banker fudge the records to show the borrower current on their loans.
This family-owned bank in Tennessee failed after the president made new loans to a borrower to cover loan payments under the guise of new construction and equipment uses.
Says the U.S. Attorney, “On occasions Stephen Henry would conceal from the Bank his use of monies from one “Sim’s loan to pay on another unrelated “Sim’s loan” by making false entries into the books and records of the Bank. Specifically, Stephen Henry omitted the filing of the “pink copy” of Oakland Depository Bank’s Official Checks, which allowed money to leave the bank, without being properly credited to a customers’ account. Without a proper recording of the “pink copy,” funding of the Official Check was done only by the Bank’s own monies and not monies belonging to Sims.”
Sentencing is in April