Former Tifton Banker pleads Guilty

| December 8, 2015

Law

MACON — A former bank president entered a guilty plea Tuesday for his role in a bank fraud scheme in which he hid underperforming and at-risk loans from the bank and the Federal Deposit Insurance Corporation (FDIC), among others.

According to a release filed by the U.S. Department of Justice, Acting U.S. Attorney G.F. Peterman, III of the Middle District of Georgia reports Gary Patton Hall Jr., 49 of Tifton, pled guilty before Senior U.S. District Court Judge Hugh Lawson in Macon to one count of conspiracy to commit bank fraud and one count of conspiracy to commit fraud against the United States.

According to facts stipulated in the plea agreement, Hall was the President and Chief Executive Officer of Tifton Banking Company (TBC) from August 2005 until June 2010. During that time, 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, 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.

Hall admitted that in certain transactions in which he exercised approval authority, he hid his personal and business interests related to the loans. In one instance, Hall approved loans to the buyer of a condominium in Panama City Beach owned by 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, Hall hid the loans from both the FDIC and state regulators. 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.

Hall also admitted to making fraudulent representations which led to commercial 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 commercial loans made by TBC as part of the scheme to mislead bank regulators and hide the bank’s true financial condition. Those guaranteed loans resulted in losses to the bank and the agencies of more than $2 million.

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 $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program.

Hall faces a potential statutory penalty of 10 years imprisonment and a potential fine of up to twice the loss amount, or both. Hall agreed in entering the plea that he owes restitution to the bank and federal agencies in the amount of $3,931,018 for losses suffered.

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