Three people who pleaded guilty to frauds and conspiracies that helped bring down Integrity Bank in Alpharetta, one of the largest bank failures in the state, were sentenced Wednesday.
Douglas Ballard, 44, a former executive vice president at the bank, received more than $200,000 in cash bribes from Guy Mitchell, 54, a hotel developer who was the bank’s largest borrower.
Ballard allowed Mitchell to draw more than $7 million on a loan purportedly for renovation and construction of a California hotel, and Mitchell used the money to buy an island in the Bahamas; a mansion in Coconut Grove, Fla.; fancy jewelry; Miami Heat basketball tickets; and travel by private jet.
After that loan was exhausted, Mitchell received $20 million in additional business loans that he used for personal expenses. He defaulted on the loans, and Integrity failed in 2008.
Joseph Todd Foster, 46, was the bank’s vice president in charge of risk management. He sold nearly all of his Integrity stock after learning the bank was “in an increasingly precarious position because of Mitchell’s financial difficulties,” the U.S. Attorney’s office said in a statement.
Ballard pleaded guilty to conspiracy to commit bank fraud and bribery, and income tax evasion. He was sentenced to serve two and a half years in federal prison, followed by three years of supervised release. He is to pay restitution of $1 million.
Mitchell pleaded guilty to conspiring to commit bank fraud and bribery. He was sentenced to five years in prison, followed by three years of supervised release. Mitchell is to pay $5.6 million in restitution and a $250,000 fine.
Foster, who pleaded guilty to securities fraud, was sentenced to three years of probation and 120 hours of community service.
“Today’s sentencing confirms that those who undermine the integrity of the financial system will be brought to justice and held accountable for their crimes,” Fred W. Gibson, Jr., acting Inspector General of the Federal Deposit Insurance Corporation, said in a statement.
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