Bank President Indicted For Hiding Risky Loans

Allison Tussey —  February 17, 2015 — Leave a comment

Gary Patton Hall Jr., 49, Tifton, Georgia, a former bank president and CEO, was charged for his role in a bank fraud scheme in which he is alleged to have hidden under-performing and at-risk loans from the bank and the Federal Deposit Insurance Corporation, among others.

The defendant was indicted by a grand jury in the Middle District of Georgia with six counts of bank fraud and one count of major fraud against the United States.

According to allegations in the indictment, Hall was the president and Chief Executive Officer of Tifton Banking Company (TBC) from August 2005 until June 2010. During that time, Hall was allegedly engaged in a long running scheme to mislead the bank and its loan committee about loans TBC made to local individuals and businesses.

As part of the scheme, Hall allegedly hid past due loans from the FDIC and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking. Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.

Hall also allegedly hid his personal and business interests in at least two of the transactions over which he exercised approval authority. For example, in one instance, Hall allegedly approved several loans to the buyer of his condominium in Panama City Beach, Florida. In doing so, Hall allegedly made several false representations about the loans to TBC’s loan committee, and failed to disclose his personal interest in the transaction. When the buyer’s loan payments became delinquent, Hall allegedly hid the loans from both the FDIC and state regulators.

Hall allegedly received $50,000 from the sale of his condominium in this transaction, which was allegedly funded in full by an unsecured loan to the buyer approved by Hall. The buyer eventually declared bankruptcy resulting in a loss of more than $400,000 to TBC.

TBC was closed by the Georgia Department of Banking and Finance in November 2010 due to its poor financial condition. At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia, announced the charges.

The case is being investigated by the FBI, the Department of Treasury’s Special Inspector General for the Troubled Asset Relief Program, the Small Business Administration’s Office of the Inspector General, the Federal Deposit Insurance Corporation’s Office of the Inspector General, the Department of Agriculture’s Office of Inspector General and the Tifton County Sheriff’s Office. The case is being prosecuted by Senior Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia.

Allison Tussey

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