Two former executives of a failed Stockbridge bank have been indicted by a federal grand jury on charges including bank fraud, federal prosecutors said Monday.
Former FirstCity Bank executives Mark A. Conner, 44, and Clayton A. Coe, 41, each face conspiracy and bank fraud charges, the U.S. Attorney's Office said in a release. Conner is charged separately with conducting a continuing financial crimes enterprise and allegedly netted, along with an unknown number of co-conspirators, more than $5 million.
Conner could face up to life in prison if convicted, and Coe could face up to 30 years, according to federal guidelines.
Conner, a former developer who at one time was the bank’s president and interim CEO, was arrested at Miami International Airport on Sunday, the second anniversary of FirstCity’s closure. Conner was returning to the U.S. from the Turks and Caicos Islands. He is being held in Miami, pending a formal detention hearing Thursday.
Coe’s initial appearance before a federal magistrate has not been set.
Messages left for Conner’s attorney were not immediately returned. A number listed for Coe in McDonough does not receive incoming calls.
Probes into Georgia failed bank cases now have returned criminal indictments or convictions in four of the state’s nation-leading 57 failures since mid-2008.
Though authorities have launched investigations into other Georgia failed banks, criminal charges expected to be rare, said John Kline, a former state bank regulator and bank consultant. The Federal Deposit Insurance Corp. separately filed in January a civil lawsuit for damages against eight insiders at one metro Atlanta community bank.
Conner and Coe, a former senior commercial loan officer, allegedly convinced the bank’s loan committee and board to approve several “multi-million dollar” commercial loans to borrowers for property directors did not know belonged to the accused. The executives allegedly falsified documents and misrepresented the terms and purposes for the loans, the U.S. Attorney’s Office said.
FirstCity failed in March 2009, costing the FDIC’s Deposit Insurance Fund more than $100 million.
“At the heart of this indictment is an abuse of power by key insiders, who are charged with tricking their own colleagues into approving millions of dollars in commercial loans to fund the defendants’ own personal business activities, and to enrich themselves at the bank’s expense,” U.S. Attorney Sally Quillian Yates said.
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