The former chief of a $2.7 billion Florida bank has been ordered to prison after admitting that he led a conspiracy to defraud banking regulators by making fraudulent loans and cooking the books.
When Orion Bank was closed by the Florida Office of Financial Regulation in November 2009, the Federal Deposit Insurance Fund estimated that related losses to its Deposit Insurance Fund would reach $615 million.
The Naples-based bank, which had $2.7 billion in total assets, was acquired by IBERIABANK.
Orion’s former chairman, president and chief executive officer, Jerry J. Williams, was indicted in March 2011 over allegations of mortgage fraud and accounting fraud.
The bank allegedly lent its directors and executives money to purchase company stock beginning in May 2009 — an illegal maneuver that gave the false impression to bank regulators that the bank was better-capitalized than it actually was.
By the summer of 2009, an on-site examination by the Federal Reserve Bank of Atlanta and the State of Florida Office of Financial Regulation quickly uncovered the fraud. A prompt corrective action issued in November 2009 forced the bank to fire Williams.
The Special Inspector General for the Troubled Asset Relief Program, Christy Romero, explained in a statement Wednesday that Williams “made false sales of foreclosed property to get it off the bank’s books and conspired to make a round-trip transaction that created the illusion of a $15 million capital infusion.”
SIGTARP became involved because Orion had requested $64 million from the Department of the Treasury through the capital purchase plan of the TARP fund.
The U.S. Attorney for the Middle District of Florida announced that Williams, who pled guilty in February to conspiracy to commit bank fraud and making false statements to federal regulators, was sentenced Tuesday to six years in prison.
Three other defendants in the case — Francesco Mileto, Thomas Hebble and Angel Guerzon — have been previously sentenced to federal prison.