2 at Faith-Based Bank Are Indicted Over Bribes
Pepe Silvia
Posts: 3,758
it would be funny had this been an onion article
http://www.nytimes.com/2010/05/08/business/08bank.html
2 at Faith-Based Bank Are Indicted Over Bribes
By ROBBIE BROWN
Published: May 7, 2010
ATLANTA — When government regulators here shut down Integrity Bank at the height of the recession, in August of 2008, the bank was seen as just another failed lender that had overvalued the real estate market and collapsed.
But a federal indictment unsealed on Friday accused two former vice presidents at the bank of hastening its downfall by selling fraudulent loans to a hotel developer in exchange for bribes.
The two executives, Douglas Ballard and Joseph Todd Foster, were charged with conspiracy, insider trading and bank fraud, according to the indictment. Mr. Ballard was also charged with bribery. The developer, Guy Mitchell, who received $80 million in loans, was charged with conspiracy and bribery.
Founded on Christian principles in 2000 in an Atlanta suburb, Integrity used the motto “In God We Trust.” The bank gave customers free Bibles, and employees prayed together at meetings. Onetime investors included a Georgia state senator and the former CNN host Lou Dobbs.
But in announcing the indictment, the United States attorney Sally Quillian Yates said Mr. Ballard and Mr. Foster had not lived up to the bank’s name or mission.
“A number of banks have suffered from the plummeting real estate market, but this bank was robbed from the inside,” she said.
Mr. Ballard, 40, and Mr. Foster, 42, could not be reached for comment on Friday and will be arraigned at a later date. Mr. Mitchell, 50, pleaded not guilty at a federal courthouse in Atlanta.
A lawyer for Mr. Mitchell, Edward Garland, said his client had been a law-abiding, profitable customer for the bank. “The collapse of the economy caused the bank failure, not his activity,” Mr. Garland said.
Georgia leads the nation in bank failures, with 38 banks having closed since 2007, according to the Federal Deposit Insurance Corporation. The state’s woes have generally been blamed on underregulation and overinvestment in real estate. But the Integrity case is a different matter.
“These indictments are very unusual,” said A. James Elliott, associate dean of Emory University School of Law, an expert in banking law.
From 2004 to 2006, Mr. Mitchell, who lives in Coral Gables, Fla., and has developed hotels, shopping centers and other commercial real estate, received the $80 million in loans from Integrity, the indictment says. His holdings include the upscale Casa Madrona Hotel and Spa in Sausalito, Calif., and the Royal Palm Hotel near Miami.
The indictment charges that he obtained much of the money under false pretenses and deposited nearly $20 million in a personal checking account, with which he bought luxury items, including a $1.5 million private island in the Bahamas.
The indictment charges that Mr. Mitchell made few, if any, payments on the loans. Instead, it says, he took additional loans, and his debt ballooned. In return for lenience, Mr. Mitchell paid Mr. Ballard more than $230,000 in bribes, the indictment says. It also accuses the two bank executives of engaging in insider trading by selling Integrity stock.
“After passing out $80 million to the developer like it was Monopoly money, both officers dumped their Integrity stock before the failed loans came to light,” Ms. Yates said.
But Mr. Garland, the defense lawyer, said Mr. Mitchell was in compliance with banking regulations and merely used a central bank account for both personal and business expenses, adding, “We expect to show that he is completely innocent.”
Integrity reported assets of $1.1 billion when it was sold to a unit of the Regions Financial Corporation in 2008. The bank had been a prominent example of faith-based banking in Georgia, with five locations.
The bank’s founder, Steven M. Skow, a Lutheran, said it gave away 10 percent of annual profits to churches and faith-based charities, donating $1.7 million in 2007. Mr. Skow said it did not discriminate against non-Christians.
“We weren’t selling religion,” he said. “We just managed the bank on godly principles, like the golden rule.”
Mr. Skow, who left the bank in 2007 and was not implicated in the indictment, said he knew nothing about the activities at the heart of the indictment. He said he had lost $22 million in stock when the bank failed.
Ms. Yates, the United States attorney, said the investigation into Integrity was continuing.
A version of this article appeared in print on May 8, 2010, on page B4 of the New York edition.
http://www.nytimes.com/2010/05/08/business/08bank.html
2 at Faith-Based Bank Are Indicted Over Bribes
By ROBBIE BROWN
Published: May 7, 2010
ATLANTA — When government regulators here shut down Integrity Bank at the height of the recession, in August of 2008, the bank was seen as just another failed lender that had overvalued the real estate market and collapsed.
But a federal indictment unsealed on Friday accused two former vice presidents at the bank of hastening its downfall by selling fraudulent loans to a hotel developer in exchange for bribes.
The two executives, Douglas Ballard and Joseph Todd Foster, were charged with conspiracy, insider trading and bank fraud, according to the indictment. Mr. Ballard was also charged with bribery. The developer, Guy Mitchell, who received $80 million in loans, was charged with conspiracy and bribery.
Founded on Christian principles in 2000 in an Atlanta suburb, Integrity used the motto “In God We Trust.” The bank gave customers free Bibles, and employees prayed together at meetings. Onetime investors included a Georgia state senator and the former CNN host Lou Dobbs.
But in announcing the indictment, the United States attorney Sally Quillian Yates said Mr. Ballard and Mr. Foster had not lived up to the bank’s name or mission.
“A number of banks have suffered from the plummeting real estate market, but this bank was robbed from the inside,” she said.
Mr. Ballard, 40, and Mr. Foster, 42, could not be reached for comment on Friday and will be arraigned at a later date. Mr. Mitchell, 50, pleaded not guilty at a federal courthouse in Atlanta.
A lawyer for Mr. Mitchell, Edward Garland, said his client had been a law-abiding, profitable customer for the bank. “The collapse of the economy caused the bank failure, not his activity,” Mr. Garland said.
Georgia leads the nation in bank failures, with 38 banks having closed since 2007, according to the Federal Deposit Insurance Corporation. The state’s woes have generally been blamed on underregulation and overinvestment in real estate. But the Integrity case is a different matter.
“These indictments are very unusual,” said A. James Elliott, associate dean of Emory University School of Law, an expert in banking law.
From 2004 to 2006, Mr. Mitchell, who lives in Coral Gables, Fla., and has developed hotels, shopping centers and other commercial real estate, received the $80 million in loans from Integrity, the indictment says. His holdings include the upscale Casa Madrona Hotel and Spa in Sausalito, Calif., and the Royal Palm Hotel near Miami.
The indictment charges that he obtained much of the money under false pretenses and deposited nearly $20 million in a personal checking account, with which he bought luxury items, including a $1.5 million private island in the Bahamas.
The indictment charges that Mr. Mitchell made few, if any, payments on the loans. Instead, it says, he took additional loans, and his debt ballooned. In return for lenience, Mr. Mitchell paid Mr. Ballard more than $230,000 in bribes, the indictment says. It also accuses the two bank executives of engaging in insider trading by selling Integrity stock.
“After passing out $80 million to the developer like it was Monopoly money, both officers dumped their Integrity stock before the failed loans came to light,” Ms. Yates said.
But Mr. Garland, the defense lawyer, said Mr. Mitchell was in compliance with banking regulations and merely used a central bank account for both personal and business expenses, adding, “We expect to show that he is completely innocent.”
Integrity reported assets of $1.1 billion when it was sold to a unit of the Regions Financial Corporation in 2008. The bank had been a prominent example of faith-based banking in Georgia, with five locations.
The bank’s founder, Steven M. Skow, a Lutheran, said it gave away 10 percent of annual profits to churches and faith-based charities, donating $1.7 million in 2007. Mr. Skow said it did not discriminate against non-Christians.
“We weren’t selling religion,” he said. “We just managed the bank on godly principles, like the golden rule.”
Mr. Skow, who left the bank in 2007 and was not implicated in the indictment, said he knew nothing about the activities at the heart of the indictment. He said he had lost $22 million in stock when the bank failed.
Ms. Yates, the United States attorney, said the investigation into Integrity was continuing.
A version of this article appeared in print on May 8, 2010, on page B4 of the New York edition.
don't compete; coexist
what are you but my reflection? who am i to judge or strike you down?
"I will promise you this, that if we have not gotten our troops out by the time I am president, it is the first thing I will do. I will get our troops home. We will bring an end to this war. You can take that to the bank." - Barack Obama
when you told me 'if you can't beat 'em, join 'em'
i was thinkin 'death before dishonor'
what are you but my reflection? who am i to judge or strike you down?
"I will promise you this, that if we have not gotten our troops out by the time I am president, it is the first thing I will do. I will get our troops home. We will bring an end to this war. You can take that to the bank." - Barack Obama
when you told me 'if you can't beat 'em, join 'em'
i was thinkin 'death before dishonor'
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Apparently, those who also help themselves to other people's money.
Hail, Hail!!!