Author Archives: Marie Browning

About Marie Browning

Marie Browning Marie Browning serves at SBFI’s Editor for the ‘Capital’ series of information pages, tracking the people, events, training and opinions of business lending across the U.S. In addition,she serves as Project Coordinator to manage the production of several content initiatives for the website and production of training presentations. Her background includes experience in general business, financial management and banking, and has worked with Managing Director Charles Green at two other companies. When not focused on business lending, Marie is a nature photographer and has published an impressive body of work from her hobby. She can be contacted at Marie@SBFI.org

Four Convicted in $1.6 Million Luxury Automobile Loan Fraud Scheme

By Vijay Daundkar

Precious W. House, 47, of Chicago was convicted of five counts of bank fraud along with three others in a $1.6 million scheme that involved dozens of fraudulent loans for luxury cars. The trial took place before U.S. District Judge Andrea R. Wood the statement from the U.S. Attorney’s office said. The U.S Attorney’s office further said that House owns two wholesale auto dealerships; Rolling Auto Inc. in Plymouth, IN., and Xpress Automotives in Chicago.

The president of Hughes Corporation Consulting, Brian K. Hughes, 41, was also sbfisigns19convicted of four counts of bank fraud and one count of making false statements on a loan application. According to the prosecutors, House and Hughes agreed to find loans for people in exchange for a 20 to 30 percent fee. They submitted false statements about the applicants’ incomes, employment, credit history and other details. The pair obtained 36 out of the 51 loans they sought. None of the applicants had any intention of buying luxury cars like BMWs, Jaguars, Porsches and other high-end cars from House’s dealership.

Hughes threatened of civil lawsuits or criminal charges against the applicants if they refused to cash the loan checks. The proceeds were then deposited in the bank accounts in Illinois, California and Georgia, which were controlled by House. The defendants obtained $1.12 million using fraudulent means out which $850,000 were obtained from credit union lenders. They had actually sought $1.6 million in loans in total.

Both House and Hughes will appear for a sentencing hearing in June. Two remaining defendents, 46 year old Keith Foster of Harvey and Crystal Williams, 31 of Georgia pleaded guilty before the case went to trial according to the U.S. Attorney’s office. Foster pleaded guilty to making false statements on a loan application and was sentenced to one year in prison and Williams admitted to one count of bank fraud and is awaiting sentencing.

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CFO Indicted in Multi-Million-Dollar Bank Fraud Case

By Vijay Daundkar

Steven D. Griffin, 59, of Berlin, New Hampshire, was charged in a nine-count indictment including making false statements to a financial institution, the United States Attorney for the District of Vermont announced in a statement. Griffin pled not guilty to the charges when he appeared before Chief U.S. District Judge Christina Reiss in Burlington on April 6. He was later released on conditions pending trial.

Isaacson Structural Steel, Inc. (ISSI), which Griffin partly owned, was one of the Isaacson Structural Steel Inc  (ISSI)largest businesses in the North Country of New Hampshire. He was also the Chief Financial Officer of the company. ISSI fabricated steel for commercial constructions and then transported it to building sites. ISSI also had subcontracted services, including erection of the steel.

Griffin made false claims and inflated the assets of the company  between 2007 and 2011 to the Passumpsic Saving Bank and other participating banks to secure loans totaling $12 million, which included $2 million loan guaranteed by the Small Business Administration in 2010. The banks lost millions of dollars when the assets of the bank were liquidated following its bankruptcy in 2011.

Arnold Hanson, the former Chief Executive Officer of ISSI, who is also part owner of the company pleaded guilty to conspiring to make false statements to financial institutions. He will be sentenced on May 27, 2015. Griffin’s sentence will be a maximum of 30 years of imprisonment and a $1 million fine on each count, if convicted.

Assistant U.S. Attorneys Paul J. Van de Graaf and Timothy C. Doherty, Jr represented the United States, whereas, Paul S. Volk of the Burlington law firm, Blodgett, Watts & Volk represented Griffin in court. The Federal Bureau of Investigation, the Office of Inspector General for the Federal Deposit Insurance Corp., and the Office of Inspector for the Small Business Administration are conducting the ongoing investigation.

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Florida Man Colludes With Bank Employees to Defraud Bank

By Vijay Daundkar

Florida man Albert Solaroli who was indicted in 2013 for bank fraud related to a $1.5 million loan he received from One Bank & Trust of Little Rock, pleaded guilty to laundering $120,000 to avoid prosecution in a pending bank fraud case. His plea was heard by U.S. District Judge Brian S. Miller. He had a plea deal with the U.S. Attorney’s Office in Little Rock in which he pleaded guilty to the charge in exchange for having the bank fraud charge dismissed.

Christopher Thyer, U.S. Attorney said in a press release that “Deceiving banks alberto-solaroli-668through fraudulent pretenses ends up hurting our entire banking industry. We are committed to investigating and prosecuting those who take advantage of the good will of bank depositors.”

He made a false claim on the loan application that his net worth was almost $170 million when he received the loan from One Bank in April 2007. He later admitted that it was a false claim. According to the plea agreement, he’s been held responsible only for the amount of $120,000 for sentencing and restitution purpose, though the charge filed by federal prosecutors refers to the $1.5 million that he received and didn’t repay.

If he was held responsible for the total amount of $1.5 million that he received from the bank, the guideline sentence would have been 37-46 months but the terms of his plea deal talks about a guideline sentence of 12-18 months. He might even be sentenced to probation instead of prison because of the short tenure of the sentence. Solaroli was represented in the court by Omar Greene of Little Rock. Sentencing date has not been announced yet.

Four former executives of the bank who helped hide the loan problem from regulators as soon as it went bad are also awaiting trial. Former EVP Gary Rickenbach allegedly invested in Solaroli’s company a few weeks before approving the loan.

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Lawyer & Con Man Attempt Fraud Posing to Buy Maxim

By Vijay Daundkar

Federal authorities arrested Harvey Newkirk, a 39-year-old attorney and New Rochelle resident on Wednesday for his alleged involvement in a scheme to fraudulently raise millions of dollars to buy the provocative men’s magazine “Maxim”. The magazine is known for scantily clothed female models, singers and actresses. He is charged with conspiring to help a convicted con man Calvin Darden Jr., fraudulently borrow millions of dollars. He was later released on $500,000 bail after he appeared in Manhattan District Court on Wednesday.

Newkirk is charged with wire fraud conspiracy, wire fraud and aggravated identity littleman15_grntheft.  Newkirk conspired with Darden Jr. to use the name of his successful father, Calvin Sr., a retired UPS Inc. executive to persuade two lenders to provide a total of $8 million. According to the prosecutors, Calvin Darden Jr. impersonated his father in an elaborate fraud to bankroll the purchase of the magazine. They are also accused of trying to convince a third investor to contribute $20 million.

Newkirk’s lawyer, Priya Chaudhry, said that her client is a “brilliant and well-respected attorney with an unblemished reputation. He has done nothing wrong, and we look forward to challenging the government’s overreaching and baseless allegations,” CBS New York quoted her as saying.

Darden was accused of using false documents and “spoofed” emails in the alleged scam by a prosecutor. He sent forged documents in his emails, also made false representations about his father’s assets in order to convince others to use money towards the purchase of Maxim magazine. Darden’s father, Calvin Sr., is a also the chairman of Darden Media and a board member of Target Corp., Coca-Cola Enterprises Inc., and Cardinal Health Inc.,

According to the complaint filed by the agent, Darden’s father denied the charge that he was Newkirk’s client, although Newkirk had claimed the opposite in an interview with the investigators. He had similar claims in several representations made by him to various lenders as he tried to secure the magazine deal. Secret Service agent Paul B. Deal also said further that Newkirk had accepted the fact in an interview with investigators that Darden’s father was not his client.

Darden had pleaded guilty in a scam that cost investors dearly a decade ago. He was sentenced to four to 12 years in prison and ordered to repay nearly $6 million.

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Six Years for Fraudulent Conversion of $2 Million Collateral

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, Scales of Justicewhich 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.

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Former Bank President Sued Over Loan Default

By Vijay Daundkar

Former Arvest Bank president Dennis Smiley resigned his position on March 13 and was recently sued by Delta Trust & Bank, in Benton County, over a personal loan default. Smiley is currently doing business as HDS Holdings, LLC. Smiley already faces loan fraud charges that claim that one of the loan payments did not clear his bank account, which led to his resignation.

Over the past four years, he has approached many banks for loans, and it has been alleged Dennis Smileythat in each case, he pledged the same restricted Arvest Bank shares as collateral for the loans. The total borrowing has totaled over $4.5 million since 2009 from more than a dozen Arkansas banks. The claims have been supported by the Uniform Commercial Code filings with Arkansas Security of State.

Smiley pledged 4,264 shares of Arvest Bank stock for collateral while taking a loan of $245,126 for HDS Holdings from Delta Trust & Bank. Smiley was not able to make the first installment on March 20 according to the lawsuit.

The complaint states that “The defendants have confessed that they are either unable or unwilling to pay the obligations to the lender. The defendants have caused the collateral to be substantially impaired and they are in non-monetary default under the express terms of the note and security agreement and guarantee.” The bank has asked for a judgment in the amount of $245,126, along with accrued interest until the debt is paid.

Co-defendant Henry Dennis Sr. was not willing to talk about his son’s legal and financial problems. He is the chairman of First State Bank of De Queen, AR, and also on the list of banks involved in the federal fraud probe.

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Torrey Pines Bank Names New Regional President

By Joyce Dimaculangan

Torrey Pines Bank announced the hiring of Fred Voss as Regional President of the San Francisco Bay Area market. In his new role, he will be responsible for growing the Bank’s market share in the Bay Area. He will also head area teams in meeting the commercial banking needs of business owners, real estate investors and professionals. He will be based in Torrey Pines Bank’s Oakland location.

Voss brings 25 years of experience in the banking industry. Before joining Torrey Pines Fred Voss Torrey Pines BankBank, he served as Senior Vice President/Team Leader Commercial Lending at a private bank and wealth management company in California. He also held various senior level positions in business banking, commercial lending, and relationship development from large institutions and community banks.

“Given his proven track record focusing on teamwork and working closely with local businesses to provide added value, Fred Voss shares the values of Torrey Pines Bank,” commented Gary Cady, CEO of the Bank. He added that Voss’ can-do attitude will be beneficial to the Bank’s Oakland and Los Altos offices in helping area organizations grow their businesses.

Voss earned a Bachelor of Arts degree in Economics and Business from the University of California in Los Angeles.

About Torrey Pines Bank

Torrey Pines Bank is a California commercial bank with the capacity to keep local business thriving. With California’s diverse economic and business environments, the bank is able to offer services to meet the unique challenges and opportunities faced by local entrepreneurs. Founded in 2003, Torrey Pines Bank provides customers direct access to experts who can help grow their businesses and the local economy as well. To learn more, go to www.torreypinesbank.com.

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Essex Bank Executive Vice President Retires

Essex Bank, the banking subsidiary of Community Bankers Trust Corporation (NASDAQ: ESXB) announced that its Executive Vice President and Chief Credit Officer, W. Thomas Townsend  will retire on June 30. Patricia M. Vogel, currently the bank’s Senior Vice President and Senior Credit Officer, will assume the post on July 1.

Mr. Townsend has been serving the Bank in his current position since Essex Bank LogoJanuary 2011. He has been working in the banking industry for 42 years. He served 20 years in the Federal Reserve Bank of Richmond and contributed 22 years as a commercial banker.

“On behalf of our Board of Directors and the management team, we are very grateful for all of Tom’s efforts during what were trying times. His leadership paved the way for a much quicker return to safety and soundness for our organization than anyone expected.” stated Rex L. Smith, III, President and Chief Executive Officer of Community Bankers Trust Corporation and Essex Bank in a release. “Given Patti’s close collaboration with Tom during our turnaround, her promotion to the Chief Credit Officer position will ensure a smooth transition and a continuation of everything that we have done to return to a strong competitive position in our markets. Patti’s contribution to our efforts will keep us excited about the future.”

Patricia M. Vogel joined the bank as a Loan Review Officer in 2009 and was promoted to the current position in January 2011. She has been serving the banking industry for 25 years with 14 years in credit risk management. She also worked at executive management level at First Charter Bank in Charlotte.

About Essex Bank:

Essex Bank, a growing small business, provides all the banking services to consumers in Virginia and Maryland.  Its new headquarters is located in Richmond, Virginia.  More information is available on www.essexbank.com.

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CenterState Bank Hires New Vice President

CenterState Bank has named Jarrod Trefelner Vice President Commercial Loan Officer. Trefelner is a native of Fort Pierce, and was worked as a commercial lender in the St. Lucie County market for nearly 10 years.  The announcement was made by Tammie Roncaglione, St. Lucie County community president.

Trefelner’s education includes a BSBA from Salem State Trefelner,Jarrod-CenterState BankUniversity; a MBA from the University of Florida and he is also a graduate from the FBA School of Banking at the University of Florida.

He proudly served as a Sonar Technician and Work Center Supervisor in the U.S. Navy for 5 years. Trefelner acquired his financial background at State Street, where he was a Mutual Fund Accountant, processing income, expenses and security transactions While there, he also delivered Net Asset Value calculations of multiple mutual funds; at PNC Bank where he was Business Banker – Assistant Vice President, selling and cross-selling  Business Banking deposit, credit and treasury management products; and by serving as Assistant Vice President Relationship Manager at J.P. Morgan where he focused on businesses with up to $10 million in annual revenues.

About Center State Bank:

CenterState Bank is owned by Centerstate Banks, Inc., headquartered in Davenport Florida. Currently the Company has 51 branches in Central Florida.  In addition to the  traditional deposit and lending products for both individuals and businesses, the Company also provides bond sales services; correspondent bank checking and fed funds purchased products; and safekeeping, bond accounting and asset/liability consulting services to small- to medium-size financial institutions throughout Florida, Alabama and Georgia.  For more information, please visit http://centerstatebank.com

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Celtic Bank Names Ben Smith Vice President

Celtic Bank Names Ben Smith Vice President

Celtic Bank has named Ben Smith Vice President of Business Development in its SBA and Commercial Lending Department. Smith will work in Salt Lake City, Utah and will report to Tom Green, Senior Vice President of SBA Lending of the Celtic Bank.

In a news release, Green stated, “We are excited to bring Ben on board as we continue to grow and expand our business.”

Smith has a strong background in the fields of real estate acquisition and commercial Smith,Ben-Celtic Bankfinance. The new Vice President has served the industry for more than 11 years. He started his profession as Commercial Loan Underwriter at Zions Bank and was promoted to Loan Acquisition Officer. In the recent past, Smith, with a strong educational background, performed as Vice President of Acquisitions for a Utah private equity firm, and played an important role in the acquisition of value added residential and commercial real estate at the national level.

Smith receive a Bachelor of Arts degree in Finance from the University of Utah.

Craig Calafati, Executive Vice President of SBA Lending at Celtic Bank, added, “Ben’s diverse background in both real estate acquisition and commercial financing is a tremendous asset to Celtic Bank.”

About Celtic Bank:

The bank, which was nominated as the sixth largest SBA lender in the US for fiscal year 2013, provides business and real estate lending solutions. The Celtic Bank, with trained specialists,offers lending solution and supports customers with a wide range of loans throughout the country. More information regarding the bank can be found on www.celticbank.com.

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