By Vijay Daundkar
Richard Thomas Gregg, a Springfield, IL businessman, was sentenced to six-and-a-half years in prison as part of an agreement after pleading guilty in federal court to one count of bank fraud and one count of bankruptcy fraud. He will also have to pay $3.1 million in compensation to the victims of his fraud schemes.
One of the pending counts involved 1717 Marketplace at 1717 S. Range Line Road, which he developed with his son. Gregg, 59, was the principal shareholder and a director of Southwest Community Bank, which closed in May, 2010. Southwest Community Bank lost $679,399 on Gregg’s personal line of credit and $871,125 in a commercial real estate fraud scheme perpetrated by Gregg, for a total loss of $1,550,524.
Gregg admitted on the factual basis to his plea agreement that “the government could prove he substantially jeopardized the soundness of that financial institution and directly contributed to the failure of the bank.”
He defrauded Great Southern Bank by selling the collateral securing a $2 million loan, and keeping the proceeds. He used 160,000 shares of stock for First Bancshares, Inc. (FBSI), the holding company for First Homes Savings Bank, as collateral to borrow $2 million from the Springfield bank.
He had obtained the securities under the custody and control of Great Southern Bank by means of false and fraudulent pretenses, representations and promises. The bank subsequently consolidated several of his outstanding loans in order to cover the missing collateral as a result of his fraud. Later the bank was forced to charge off $2,316,264 on this consolidated loan. The actual value of the FBSI shares was determined to be only $1,350,400, Gregg’s conversion of which was fraudulent.
Gregg filed a personal bankruptcy petition in March, 2013 containing numerous false declarations and concealed fraudulent transfers of property while he was already under indictment for bankruptcy fraud relating to the bankruptcy petition of his corporation, 1717 Market Place, LLC.
Gregg was also a real estate developer, an investor and a licensed insurance agent for the Shelter Mutual Insurance Company and had ownership interest in and controlled a number of business entities. Gregg and his wife were also principal stakeholders in Glasgow Savings Bank, which failed in 2012. It was one of the oldest banks west of the Mississippi River prior to its failure.