3 found guilty for defrauding FDIC

A federal jury has found three bankers from the now defunct Coastal Community Bank guilty on a number of fraud counts.

Late Wednesday night, a federal jury returned guilty verdicts against 66 year old Terry Dubose, 40 year old Woody West and 62 year old Frank Alfred Baker on charges ranging from wire fraud and filing false claims against the Federal Deposit Insurance Corporation to aiding and abetting a false claim against the United States.

The verdicts were handed down following a trial that lasted almost three weeks.

The three men were major stakeholders in Coastal Community Bank, which had branches from Panama City to Apalachicola and Bayside Savings Bank, based in Port St. Joe - both banks failed on July 30, 2010.

The case involved a fraud committed against the FDIC’s Temporary Liquidity Guarantee Program, which was created at the height of the nation’s financial crisis to encourage banks to begin lending to one another again.

The program allowed the FDIC to guarantee loans made by one financial institution to another financial institution in an amount up to 125% of the borrower’s existing unsecured debt.

The three men were found guilty of falsely claiming that a 3 million dollar loan secured by 100% of the stock of Coastal Community Bank and Bayside Savings Bank was unsecured so that Coastal could get an FDIC-guaranteed loan of nearly 3.8 million dollars under the Temporary Liquidity Guarantee Program.

The US Attorney said the defendants – bank officers and a bank attorney – took advantage of the Temporary Liquidity Guarantee Program, which was designed to help the country avoid financial collapse, and instead used the program to enrich themselves.

The defendants are facing a maximum of 30 years’ imprisonment on each count of conspiracy to commit wire fraud, wire fraud, and making false statements to the FDIC.

They face a maximum of five years’ imprisonment for the false claim against the United States.

Sentencing will be held in July.


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