FDIC sues insiders of failed Georgia bank

Federal regulators have sued eight former insiders of a failed Lawrenceville bank, accusing the former bankers and directors of taking “unreasonable risks.”

The Federal Deposit Insurance Corp. said in a civil complaint filed Wednesday that officers and directors of American United Bank, including former chief executive T. Glenn Thompson, “disregarded” regulators’ warnings about the bank’s lending.

American United far outpaced the concentration in commercial real estate loans specified in its business plan, and regulators contend the defendants “effectively turned a blind eye” to its lending policies and underwriting standards.

The suit filed in U.S. District Court in Atlanta says the insiders failed to follow the bank’s policies to develop adequate appraisals or determine such things as a borrower’s ability to repay.

American United, whose building was modeled after the White House, failed in October 2009, swallowed up by heavy losses in speculative real estate loans. The bank also was a frequent purchaser of small chunks of bigger loans made by other lenders, which are known as loan participations.

Eighty-three banks have failed in Georgia since mid-2008, more than in any other state. Georgia also leads the nation in lawsuits against insiders of failed banks, with nine.

The FDIC seeks at least $7.3 million in damages in hopes of recouping what it paid from the fund that protects depositors at failed banks. The suits seek compensation either from liability insurance policies, if the bank had any when it failed, or from bank leaders personally.

The American United complaint asserts gross negligence and simple negligence.

Also named in the suit are former Chief Lending Officer Joel C. Taylor and former directors Surinder Bahl, James M. Jett, Pulukottil I. Joy, Gursharan Pannu, Kanti B. Patel and William F. Rubin.

Attempts to reach the former bank officials were not immediately successful.

American United was founded with a diverse board of directors. Among them was one-time Democratic gubernatorial candidate David Poythress, who was not named as a defendant in the suit.

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