FirstCity Bank Pres. Enters Guilty Pleas
Former Canton resident "treated FirstCity Bank's commercial real estate lending operations like his own personal piggy bank," United States Attorney said today.
A former Canton resident who allegedly fleeced millions from the failed FirstCity Bank of Stockbridge pleaded guilty today to charges of conspiracy to commit bank fraud, the United States Attorney's Office said.
Mark A. Conner, whose positions with the bank included vice chairman, acting chairman, president and CEO, also pleaded guilty to perjury in connection with a personal bankruptcy filing earlier this year.
Today's development comes seven months after officials unsealed an indictment that alleged Conner and bank vice president Clayton A. Coe of McDonough duped colleagues into approving multiple multimillion-dollar commercial loans to borrowers who were actually purchasing personal property owned by the executives.
The bank's loan committee and board of directors didn't know that the men owned the property.
Between February 2006 and February 2008, the scheme yielded more than $5 million for Conner and his conspirators, federal authorities said at the time.
State and federal authorities seized FirstCity on March 20, 2009. Two years later, federal agents at Miami International Airport arrested Conner as he returned from the Turks and Caicos Islands.
He's been in federal custody ever since on charges of conspiracy to commit bank fraud, bank fraud, conspiracy to commit money laundering and making false entries in the records of a financial institution insured by the Federal Deposit Insurance Corp.
"Our nation’s bank problems have contributed to the economic distress our citizens continue to experience across the country," United States Attorney Sally Quinlan said today in a news release. "We have felt this keenly in Georgia, with more than 70 bank failures since mid-2008, and another failure as recently as October 14, 2011. This defendant treated FirstCity Bank’s commercial real estate lending operations like his own personal piggy bank, siphoning off millions of dollars from fraudulent commercial real estate loans, ultimately running FirstCity into the ground."
The deception continued in January when he filed for personal bankruptcy and in February when he testified in bankruptcy court, according to Yates' office.
Under oath, Conner, 45, testified that his filing was accurate and he was "down to less than nothing.
"The investigation showed that in truth, Conner had and controlled off-shore accounts containing over $545,000 when he swore under oath that he was broke," said Patrick Crosby, the spokesman for the U.S. Attorney's Office. "In addition, Conner had $4 million in real estate investments from his off-shore accounts (that is, assets of his bankruptcy estate) that were not disclosed in his bankruptcy petition or in his sworn testimony."
A sentencing hearing has been scheduled for 10 a.m. Jan. 31, 2012.
If United States District Judge Steve C. Jones accepts Conner's guilty pleas, he will be sentenced to 12 years in federal prison on all of the charges, receive a lifetime ban from the banking industry, forfeit $7 million and pay significant restitution to the Federal Deposit Insurance Corp. and victim banks.
WHAT OTHERS ARE SAYING
- Christy Romero, acting special inspector general for TARP—“Despite Conner's fiduciary duties as president, CEO, and chairman of FirstCity Bank, for years he went to great lengths to lie to bank regulators, cheat the bank, and steal millions of dollars. He then attempted to steal more than $6 million in TARP funding from U.S. taxpayers and Treasury to cover his tracks. It is precisely this type of deception and greed by key bank insiders that contributed to and exacerbated the financial crisis. Fraud in connection with TARP will be aggressively investigated and prosecuted by SIGTARP and its law enforcement partners.”
- FDIC Inspector General Jon Rymer—“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in defending the integrity of the financial services industry by investigating bank fraud perpetrated by senior bank officers. We are especially concerned in situations like this one where the former Chairman and CEO of the bank misused his position of trust to defraud FirstCity Bank of Stockbridge, thus contributing to its failure. When he and his co-conspirators convinced at least 10 other federally insured institutions to invest in fraudulent loans to further the scheme, they jeopardized the safety and soundness of those institutions as well. We are committed to continuing our efforts to prosecute such criminal misconduct, help maintain the stability of the Nation's financial institutions, and ensure the viability of the Deposit Insurance Fund.”