~Contributed by U.S. Department Of Homeland Security ~
Former Tifton Banking Company CEO And President Sentenced
A
former bank president was sentenced today for his role in a bank fraud scheme in which he hid underperforming and at-risk loans from the bank,
the Federal Deposit Insurance Corporation (FDIC), and others, announced
Acting U.S. Attorney G.F. Peterman, III of the Middle District of
Georgia.
Gary Patton Hall Jr., 49, of Tifton, Georgia, was sentenced by Senior
U.S. District Court Judge Hugh Lawson in Valdosta, Georgia to serve 84
months in prison for conspiracy to commit bank fraud and conspiracy to
commit fraud against the United States. Mr. Hall was also ordered to pay
restitution in the amount of $3,931,018 to the Federal Deposit
Insurance Corporation (FDIC), as the successor in interest to the bank,
and to the Small Business Administration and the U.S. Department of
Agriculture, as guarantors on fraudulent loans.
Mr. Hall entered a guilty plea to the charges on December 4, 2015.
According to facts stipulated in the plea agreement, Mr. Hall was the
president and Chief Executive Officer of Tifton Banking Company (TBC)
from August 2005 until June 2010.
During that time, Mr. Hall was
engaged in an ongoing scheme to mislead the bank and its loan committee
about loans TBC made to local individuals and businesses. As part of
the scheme, Mr. Hall 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.
Mr. Hall admitted that in certain transactions in which he exercised
approval authority, he hid his personal and business interests. In one
instance, Mr. Hall approved loans to the buyer of a condominium in
Panama City Beach, Florida, owned by Mr. Hall himself. In doing so, he
made 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, Mr. Hall hid the loans from
both the FDIC and state regulators. Mr. Hall received $50,000 profit
from the sale of his condominium in this transaction, the entire
purchase price being funded by an unsecured loan to the buyer approved
by him. The buyer eventually declared bankruptcy, resulting in a loss
of more than $400,000 to TBC.
Additionally, Mr. Hall admitted to making fraudulent representations
which led to loan guarantees being issued by the United States Small
Business Administration and the United States Department of Agriculture
on two other loan transactions. The loans were made by TBC, and
guaranteed by the government agencies, to refinance earlier
non-performing loans made by TBC. Those guaranteed loans resulted in
losses to the bank and the agencies of more than $2,000,000.
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 $3,800,000 it received from the Department of
Treasury’s Troubled Asset Relief Program.
Acting United States Attorney G.F. Peterman, III said, “As the
president of the Tift Banking Company, Gary Patton Hall owed a duty to
its depositors to protect and care for their money more carefully than
if it were his own; instead, he used it like it was his own.
His
self-dealing and dishonesty violated the trust his own community and
neighbors had placed in him, causing harm to them and to the reputation
of the banking industry itself. I commend the federal and local
authorities who investigated this case and brought Mr. Hall to justice
for his violation of that trust.”
“Today, another TARP banker was sentenced to jail for hiding a bank’s
past due loans during the crisis to make the bank appear healthy,” said
Christy Goldsmith Romero, Special Inspector General for TARP (SIGTARP).
“SIGTARP special agents working with prosecutors at the U.S. Attorney’s
Office in the Middle District of Georgia and other law enforcement
partners uncovered that Tifton Banking Company President and CEO Pat
Hall engaged in a long running fraud scheme that began pre-crisis in
2005.
He made risky bank loans pre-crisis, and later criminally
concealed the fact that the loans were past due and that the collateral
had dropped in value. On behalf of the bank, in 2009, Hall obtained
$3.8 million in TARP bailout funds to fill holes in the bank’s books
caused by his fraud, all of which was lost when the bank failed. He
deceived taxpayers, shareholders including Treasury, banking regulators
and the bank’s loan committee. TARP was not a bailout for bank fraud
and SIGTARP and our law enforcement partners will ensure that bankers
who commit fraud related to TARP will be brought to justice.”
"The FDIC Office of Inspector General is pleased to join the U.S.
Attorney's Office and our law enforcement colleagues in announcing Mr.
Hall's sentencing. This sentence is fitting punishment for a former
bank insider who violated the public trust and caused harm to the bank.
Our expectation is that his sentencing will deter others who would seek
to undermine the integrity of the banking system. Our office remains
committed to helping ensure the safety and soundness of FDIC-insured
banks throughout the country," Jason T. Moran, Special Agent in Charge,
Atlanta Region, FDIC Office of Inspector General, stated.
“The defendant’s actions placed his self-interest and personal gain
above others to which he had a responsibility resulting in significant
loss to the taxpayer,” said Inspector General Peggy E. Gustafson. “The
Office of Inspector General will aggressively pursue fraud, waste, or
abuse against SBA programs. I want to thank the U.S. Attorney’s Office
and our law enforcement partners for their dedication in pursuing
justice in this case.”
The case was investigated by the FBI, the 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 Tift 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.
Questions concerning this case should be directed to Pamela Lightsey,
Public Information Officer, United States Attorney’s Office, at (478)
621-2603.
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