The wave of bank failures that hit North Georgia especially hard moved into criminal court Thursday as authorities prepared to accept a guilty plea from a former lending official in Habersham County.
Randy Jones was scheduled to plead guilty for his role in a multimillion-dollar fraud scheme involving Cornelia-based Community Bank & Trust. Jones’ hearing in U.S. District Court in Gainesville was postponed after he suffered a serious injury at his home. His lawyer, Bruce Maloy, said Jones cut his leg in a chainsaw accident.
Jones was executive vice president and chief credit officer at Community, which regulators shut down in January. He left the bank in May 2009.
Since 2002, 49 banks have failed in Georgia, more than in any other state.
Federal prosecutors allege Jones received kickbacks from fraudulent transactions involving real-estate loans he approved beginning in 2005. In one case, he approved a loan that allowed a customer, Joseph C. Penick Jr., to buy a 54-acre parcel in Hart County for $521,836. About a month later, prosecutors say, Jones arranged for Penick to sell the property to another customer, Douglas C. Emig, financing that deal for about $1.6 million.
With the proceeds, prosecutors say, Penick gave kickbacks of about $400,000 to Jones and $270,000 to Emig.
Jones allegedly approved another loan to Penick, for $672,086, to finance his purchase of 98 acres in Hart County. Using another $1.6 million loan, Emig bought the property eight days later. In that instance, prosecutors allege, Jones received about $370,000 and Emig $200,000.
Prosecutors say Jones also approved $2.8 million in loans to straw borrowers so that another customer, real estate developer Berrong Moulton, could pay interest on past-due loans at Community Bank. Penick, owner of Baldwin General Store; Emig, part-owner of a concrete company; and Moulton have pleaded guilty and are scheduled to be sentenced on Jan. 6.
Jones also allegedly obtained more than $800,000 from the bank through loans to family members who were unaware he was using their names. He is alleged to have forged his relatives’ signatures.
Federal regulators strongly criticized Community Bank in a report issued in September, several months after the 110-year-old institution’s assets were acquired by SCBT Financial Corp. of Columbia. The inspector general of the Federal Deposit Insurance Corp. said the bank lacked internal controls over its lending operations and failed to follow its own loan policy. One unnamed senior officer made at least $10 million in bad loans, the report said, and concealed a $500,000 line of credit issued “without proper approval.”
Community Bank also drew attention this fall over a series of loans it made to Gov.-elect Nathan Deal for the benefit of his daughter and son-in-law’s failed business venture. Deal recently said he owes about $2.1 million and is trying to sell property and liquidate other assets to pay that and other debts.
Jones was the chief lender at the branch that made the loans, totaling $2.4 million, to Deal from 2006 to 2008.
Jones' hearing has not yet been rescheduled.
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