An executive from a western North Carolina bank pleaded guilty this week to charges involving more than $1 million in loans. The banker was charged with one count of theft/embezzlement/misapplication by a bank officer after she falsified at least 11 loan applications between March 2006 and November 2009.
The falsified loans were made to straw borrowers, with the banker collecting the payments. A straw borrower is a person whose name is on the loan application but who is not the person collecting or paying back the loan. The straw borrower is not necessarily involved with the scheme and is often not even aware that his or her name is on the application. In this case, the U.S. Attorney’s Office said that the banker was being helped by others but did not name any suspects.
Nor did the U.S. Attorney specify how they detected the embezzlement. Typically, though, authorities are tipped off when a straw borrower dies but continues to collect on the loan.
The defendant agreed in the plea bargain that she would forfeit property law enforcement agencies seize as repayment of the loans. She also agreed not to work in any FDIC-insured bank again. She could also face up to 30 years in jail.
The bank is a small bank based in Winston-Salem with 22 branches that are, for the most part, in western North Carolina. With this case, the bank joins the company of several other Charlotte-area banks that have been the victims of theft by their executives. In one bank, a manager accepted bribes worth $38,000; in another, an executive pleaded guilty to embezzling more than $11 million in a scheme that involved falsifying contractor invoices.
Resource: Charlotte Observer “Mooresville Banker Charged With Falsifying $1M in Loans” 10/18/10