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Former Bank President and other Officers Indicted in Massive Fraud that Preceded the Collapse of First National Bank
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Department of Justice
United States Attorney Edward J. Tarver
Southern District of Georgia
FOR IMMEDIATE RELEASE
CONTACT: JAMES D. DURHAM
FIRST ASSISTANT UNITED STATES ATTORNEY
FORMER BANK PRESIDENT AND OTHER OFFICERS INDICTED IN MASSIVE FRAUD THAT PRECEDED THE COLLAPSE OF FIRST NATIONAL BANK
SAVANNAH, GA: The former president and six other officers of First National Bank of Savannah were indicted by a federal grand jury, accused of defrauding First National Bank and other banks out of millions of dollars. The long-running scheme allegedly contributed to the failure of First National Bank in 2010, which will cost the FDIC deposit-insurance fund over $90 million.
The 35-count indictment, returned today in federal court in Savannah, charges the following former officers of First National Bank:
United States Attorney Edward J. Tarver said, "The State of Georgia leads the nation in bank failures, with 84 banks failing since 2008, including First National Bank. As the nation still recovers from a banking crisis of epic proportions, citizens should know this: no matter the complexity of the scheme, bank officers who place FDIC-funds at risk through fraud and other criminal conduct will be brought to justice."
According to the allegations in the indictment, as First National Bank's financial condition began to deteriorate, the Defendants schemed to hide from the bank, members of the bank's Board of Directors and from federal regulators millions of dollars in non-performing loans. The Defendants accomplished the scheme by unlawfully loaning money to unqualified nominees to make interest and other payments on other non-performing loans; enticing others to take over non-performing loans with hidden promises, side deals and other terms unfavorable to First National Bank; and recruiting other banks to fund non-performing loans based upon fraudulent misrepresentations about the quality of the loans. To assist in their scheme, the Defendants falsified and fabricated numerous bank documents and records.
This case is the result of a joint investigation conducted by the Board of Governors of the Federal Reserve Office of Inspector General; the FDIC Office of Inspector General; the U.S. Department of Treasury Office of Inspector General; the U.S. Secret Service; and the United States Attorney's Office. First Assistant United States Attorney James D. Durham and Assistant United States Attorney Jennifer Solari are prosecuting the case on behalf of the United States.