Mug Shot Monday – Feds Use Bankers Email Against Him

April 7, 2014

by Bob Coleman
Editor, Coleman Report

Friday, I wrote about an Arkansas community banker who was indicted by a grand jury for covering up a failed $1.5 million loan to a Florida businessman.

His indictment was posted online today and more damning facts have emerged. Allegedly.

I have covered numerous instances where the borrower has flipped and testified against the banker to make the prosecutor’s case.

This has a new twist. Seems our banker failed Email 101. The first thing you are taught in Email 101 is to never assume emails are private, and that they can easily end up in the hands of those you are talking about deceiving – specifically bank regulators. Especially when you use terms of “you can’t be involved in the murder and solve the crime,” “name is for discussion purposes; we will use something more discreet,” and “slushy fund,” which are used in the indictment for bank fraud.

After the bank received a judgment against Alberto Solaroli for the $1.5 million, Gary Rickenbach wrote in an email, “I consider it remote we will ever recover anything.”

The problem for bank management is this defaulted loan would make it difficult for the Treasury to approve its TARP application. The bank was running low on cash and desperately needed TARP funding.

To hide the bad loan from the regulators, as well as the Board of Directors, the feds allege the following facts.

“On December 28, 2007, RICKENBACH wrote a memorandum to Onebanc’s Executive Loan Committee acknowledging that A.S.’ s line of credit was in arrears, and that the collateral used to secure the loan was significantly impaired. RICKENBACH stated that he had talked with A.S., and the line of credit would be paid off before the end of January, which was before the call report had to be made to the FDIC.

“On January 19, 2009, RICKENBACH emailed Coconspirators A, B, C, and D in which RICKENBACH outlined “Significant Issues/Decisions Regarding Overall [A.S.’s] Plan” which included One Financial Corporation, the bank holding company, loaning $380,000 to [D.C.] although “OFC may not have enough cash to do this until receipt of TARP funds” and an “OBT [Onebanc] Loan to “Recovery, LLC” $1,220,000 (name is for discussion purposes only; we will utilize something more discreet)”. These two loans would pay off A.S.’s debt to the bank.

“On January 19, 2009, Coconspirator A emailed RICKENBACH and copied Coconspirators B, C, and D stating, ‘Gary – I know that your [sic] busting your *** on this mess – But you can’t be involved in the murder and also solve the crime.’

“On January 29, 2009, RICKENBACH signed a secured loan on behalf of Onebanc, as Executive Vice President, to Ox Investments LLC in the amount of $459,075.20 for “development investments.” The loan was secured in part by “all sums due from [A.S.] for a loan in the original amount of $1,500,000 . . .” and a Judgment against A.S. in the amount of $1,598,958.85.

“On January 29, 2009, RICKENBACH signed a secured loan on behalf of Onebanc, as Executive Vice President, to Crestwood Investments LLC which was signed by Coconspirator Z in the amount of $1,125,000 for “funds for development activity.” The loan was secured by three lots owned by Crestwood Investments LLC.

“On February 4, 2009, RICKENBACH sent an email to Coconspirators A, B, C, and D stating, ‘I’ve been focused on cleaning up the documentation on the other 2 deals so we can get them booked. Documents with revisions went to [Coconspirator Z] yesterday so I think those are close. I will hot step with [D.C.] to get the other part done. It was considered most important to get the Crestwood/Ox loans done to clear the deck and when [D.C.’s] deal gets done it will just reduce the Ox loan . . .I will do better at keeping everyone up to speed.’

“In or about May 2009, Coconspirator B requested an increase of TARP monies to $17,300,000. That request was granted and, as a result, on June 5, 2009, OFC received $17,300,000 from TARP Capital Purchase Program. Prior to this money being deposited into the OFC bank account, OFC (that’s the bank holding company) had a balance of $5,741.63.

Read the indictment to learn how the Feds believe the bankers churned the loans in an attempt to hide the loan loss from the regulators.

Read the indictment to see how the bankers worked to keep the loan loss off the books.