A new federal indictment was handed up this week against former Canton resident Mark Conner and two other top officials of the failed FirstCity Bank of Stockbridge.
The indictment from a federal grand jury in Atlanta charges Conner, 45, Clayton Coe, 44, and new defendant Robert Maloney Jr., 47, with 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.
Conner also is charged with conducting a continuing financial crimes enterprise at FirstCity from February 2006 to February 2008. Federal investigators say Conner, whose positions with the bank included vice chairman, acting chairman, president and CEO, and his conspirators produced more than $5 million in illegal proceeds in that time.
Coe, who was a bank vice president, also is charged with making a false federal credit application.
State and federal authorities seized FirstCity on March 20, 2009.
Exactly two years later, under a March indictment against him and Coe, Conner was arrested when he returned to the United States from the Turks and Caicos Islands, and Coe, from McDonough, was arrested a week later.
U.S. District Judge Steve Jones had kept Conner in custody since then because of the risk that he would flee, while Coe was released to home detention.
Both men are due to be arraigned under the new indictment July 1 before U.S. Magistrate Judge Janet King.
Maloney, also from McDonough, was the corporate counsel for FirstCity, and U.S. Attorney Sally Yates says the three men and others tricked the bank’s loan committee and board into approving multimillion-dollar commercial loans to people who were buying property secretly owned by Conner or Coe.
The conspirators’ lies led 10 other federally insured banks to invest in the fraudulent loans, spreading the damage, the indictment says.
Coe also benefited because he received bonus for originating the loans, the indictment says, and Maloney received extra legal fees from the fraudulent transactions even though he was on salary with the bank.
FirstCity unsuccessfully sought federal assistance through the federal Troubled Asset Relief Program to avoid being shut down. Regulators reported finding the fraud after taking over the bank.
If convicted of conducting a continuing financial crimes enterprise, Conner would receive a mandatory minimum sentence of 10 years in federal prison, with a maximum of life in prison, plus a $10 million fine.
The money-laundering-conspiracy charge against the three men carries a maximum sentence of 10 years in prison and a fine of twice the value of the money earned from the crime. Each of the other counts against the three men carries a maximum sentence of 30 years in prison and a $1 million fine.
Here’s what federal officials said in a prepared statement about today’s announcement:
- Christy Romero, acting special inspector general for TARP—“Today's indictment involves another unfortunate example of allegedly brazen criminal conduct by senior bank officials who tried to conceal their fraud from regulators and improperly access TARP funds. As the bank's top legal officer, Maloney maintained a position of trust within the bank and had a special duty to prevent and detect misconduct. The indictment alleges that Maloney violated his important gatekeeper responsibilities and conspired with Conner and Coe in a criminal scheme that victimized unwitting federally insured banks who invested millions of dollars into fraudulent loans. Fortunately, their attempts to victimize Treasury and the American taxpayers by obtaining TARP funds were unsuccessful.”
- FDIC Inspector General Jon Rymer—“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in announcing the indictment of Mr. Maloney for his alleged role in this multimillion-dollar bank fraud and associated money laundering activities. It is especially important to investigate and prosecute cases where trusted professionals, such as attorneys who owe a fiduciary duty to the bank, violate that duty and abuse their positions to undermine the integrity of the financial services industry.”
- Reginael McDaniel, IRS Criminal Investigation special agent in charge—“IRS Criminal Investigation is committed to protecting the integrity of our financial institutions, and we will use all the legal tools available to assist in the investigation and prosecution of those who attempt to damage that integrity.”