The case of once-presumed-dead fugitive banker Aubrey Lee Price is only one of the more recent accounts of executives at financial institutions in Georgia going bad. The state has a long history of a troubled banking industry, with leaders accused of a variety of crimes — some of them contributing to Georgia’s No. 1 ranking in U.S. bank failures since 2008.
Here’s what happened in some of the cases:
1980s
Bert Lance, who was director of the Office of Management and Budget for nine months for former President Jimmy Carter, was twice caught up in allegations of improprieties at the Calhoun First National Bank, where he was president. But in 1980, a federal jury in Atlanta acquitted him of nine criminal counts arising from a federal banking investigation and three other charges were dismissed. Then in 1986 Lance was accused of check kiting, receiving money from loans made to other persons and obtaining money from the Calhoun bank’s credit life insurance company that should have gone to the bank. Lance paid a civil fine and agreed to never again work for a federally insured bank without prior written approval of federal regulators. Lance died last year.
1990s
The Atlanta branch of the Banca Nazionale del Lavoro was at the center of an investigation into off-the-books loans to Iraq for weapons. The head of the Atlanta branch, Christopher Drogoul, served a little more than three years in federal prison in the 1990s for providing up to $5 billion in credits to finance Iraq’s imports of food, machinery and weapons in the late 1980s. He recorded the loans on a separate set of books, which he didn’t show to federal regulators or superiors at his bank.
2011
Jeffrey Levine, a former executive vice president of the Omni National Bank in Atlanta, pleaded guilty in 2010 to federal charges he doctored the bank’s books to hide losses on bad loans. He was sentenced in 2011 to five years in federal prison and ordered to pay $6.8 million restitution. Levine then helped prosecutors bring other federal cases. And almost two years ago federal regulators brought a civil lawsuit against 10 former insiders of the failed Omni National Bank in Atlanta.
Randy Jones, the former chief loan officer of Community Bank & Trust, was sentenced to 10 years in prison in May for taking kickbacks for phony land deals and for issuing fraudulent loans. Jones used the proceeds to start up six Zaxby’s restaurants and he spent $150,000 on jewelry for his wife.
2012
Three officials at FirstCity Bank in Stockbridge pleaded guilty to conspiracy and bank fraud in 2011 and 2012 for things they did in the years before federal authorities seized the institution. Mark A. Conner, former president, was sentenced to 12 years in prison for conspiracy to commit bank fraud. He pleaded guilty in another case to lying in his personal bankruptcy filing three years ago and was sentenced to 21 months in prison, to be served at the same time he was serving his time for the conspiracy and fraud convictions. Clayton Coe, a former bank vice president, was sentenced to more than seven years for defrauding the bank. Attorney Robert E. Maloney, who did work for Conner, was sentenced 39 months for bank fraud.
2013
Adam Teague, the former vice president of Appalachian Community Bank, was sentenced last April to five years in federal prison and five years on probation for conspiring to defraud the Ellijay institution by orchestrating $7 million in sham real estate deals. He also was ordered to forfeit $5.8 million he received in the conspiracy as well as the property purchased with the illegal proceeds.
A then-current and former vice president at Integrity Bank in Alpharetta were sentenced in November for their roles in frauds and conspiracies that led to one of Georgia’s largest bank failures. Douglas Ballard, the former executive vice president, was sentenced to 2 ½ years in prison for conspiracy to commit bank fraud and bribery, and ordered to pay $1 million in restitution. Joseph Todd Foster, once the vice president in charge of risk management, was sentenced to three years on probation for securities fraud, selling his stocks in the bank when he learned the bank was failing. Developer Guy Mitchell was sentenced to three years on probation for using a $7 million loan taken to build a hotel to instead buy an island, a mansion in south Florida and other things.
Seven former officers of the failed First National Bank of Savannah, including its ex-president, were indicted on bank fraud charges that stemmed from an illegal cover up of bad loans that cost $90 million in deposit insurance.
Two of them pleaded guilty last fall. Former vice president at the First National Bank, Jay Patrick Gardner, 63, pleaded guilty to one count of bank fraud on Oct. 25. Then on Nov. 12, Heys Edward McMath III, 59, once the bank’s president and CEO, pleaded guilty to conspiring to defraud the First National Bank and other federally insured banks.
According to the 47-count indictment, Gardner, McMath and five other executives hid from the bank’s board of directors and federal regulators millions of dollars in non-performing loans. They used falsified bank records and documents and promises and side deals to get other banks to fund non-performing loans. The First National Bank failed and was taken over by federal regulators on June 25, 2010.
Garnder and McMath will be sentenced later this year.
2014
The remaining five of the seven former executives named in the January 2013 indictment pleaded guilty this month for their roles in the demise of the First National Bank in Savannah.
Three of them, all at one time commercial loan officers, pleaded guilty to two counts of bank fraud. They were Alan Robert Fleming, 37, former president of a Tybee Island branch bank; former bank vice president and chief financial officer Stephen Michael Little, 65; and Robert Wilson Dailey, 52.
Isaac Jefferson Mulling, 53, former senior vice president and also once a commercial loan officer, pleaded guilty to one count of bank fraud. JeffreyAllen Farrell, 45, the former president of a Richmond Hill branch bank and a commercial loan officer of First National, pleaded guilty to one count of making false entries in bank records. They also will be sentenced later this year.
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