Two former bank officers of the failed Integrity Bank pleaded guilty to various charges in federal court Tuesday in a fraud scheme authorities say led to the Alpharetta institution's collapse.
Douglas Ballard, 4o, and an executive vice president at Integrity, pleaded guilty to one count of conspiracy to commit bank fraud and bribery and one count of tax evasion.
Joseph Todd Foster, 42, and executive vice president of risk management, pleaded guilty to securities fraud for dumping 30,000 shares of his Integrity shares when he learned the bank didn't have enough liquid security to cover a $20 million loan to its largest borrower.
The guilty pleas come two months after the two Atlanta men were indicted on those charges, stemming from a series of loans made to that borrower, a Florida hotel developer.
That developer, Guy Mitchell, 50, of Coral Gables, Fla., previously pleaded not guilty and is awaiting trial.
Founded in 200o with a faith-based focus, Integrity had more than $1 billion in assets when it failed in August 2008.
Allison Dawson, Foster's federal defender, said he was not involved in any bank fraud and received no bribes.
She said he raised concerns about potential problems with loans the bank already made to Mitchell and suggested Integrity not extend additional credit to him. "But they didn't listen to him and approved a $20 million loan to Mitchell in August 2006," Dawson said. "In an effort to protect himself, he sold his own shares."
Ballard's attorney, Aaron M. Danzig, declined comment Tuesday.
Sentencing dates have not been set, and according to the plea agreements, both Ballard and Foster are cooperating with federal officials in theirinvestigations.
“Any time you have a criminal indictment arising out of the banking environment, that’s a significant event,” said Scott Sorrels, a partner in the banking practice with Sutherland Asbill & Brennan. “I don’t think this will be the end of it.”
Though illegal acts were likely the exception and not the rule for many of Georgia's 39 failed banks, the U.S. Attorney's Office is known to be looking into alleged impropriety at other failed banks.
Sorrels said the pleas suggest that “perhaps some of the backlog [in examining criminal cases] is clearing. They’ve been working on Integrity for a while. Now they can redeploy resources maybe to other institutions that haven’t gotten the same level of attention.”
Staff writer J. Scott Trubey contributed to this article.
About the Author
Credit: Jenni Girtman