A former Stockbridge banker has admitted to participating in a multi-million-dollar bank fraud scheme.
Mark A. Conner, 45, the former president of FirstCity Bank of Stockbridge, pleaded guilty, Friday, to conspiracy to commit bank fraud. The charges stem from reported misconduct at the bank in the years before it was seized by state and federal authorities on March 20, 2009.
Conner, formerly of Canton, Ga., and Tallahassee, Fla., pleaded guilty to one count of conspiracy to commit bank fraud. He was indicted in March of 2011 –– along with FirstCity bank’s former chief loan officer, Clayton A. Coe –– on 12 counts of conspiracy to commit bank fraud, bank fraud, and operating a continuing financial crimes enterprise.
A grand jury, in June of this year, charged Conner and Coe with additional crimes in a superseding indictment, which also added FirstCity Bank’s former inside attorney, Robert E. Maloney, Jr., as a new defendant in the case, according to a news statement from federal officials.
United States Attorney Sally Quillian Yates said Conner “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.
“Along the way, Conner and others defrauded federal and state regulators, and at least ten other federally insured banks in Georgia and Florida that invested in the fraudulent, multi-million-dollar loans,” Yates added.
Conner also pleaded guilty to perjury, related to his personal bankruptcy filing in federal bankruptcy court in January of 2011.
The U.S. Attorney’s office said Conner committed the initial crimes during stints as vice chairman of the board of directors, a member of the bank’s loan committee, bank president, acting chairman and chief executive officer. He held those positions at varying points, from 2004 to 2009.
“While serving in these positions, Conner conspired with others to defraud FirstCity Bank’s loan committee and board of directors into approving multiple, multi-million-dollar, commercial loans to borrowers who, unbeknownst to FirstCity Bank, were actually purchasing property owned by Conner or his co-conspirators.”
The U.S. Attorney’s Office, in a news release issued Friday, said Conner and his co-conspirators misrepresented the nature, terms, and purpose of the loans, falsifying documents and information presented to the bank’s loan committee and the board of directors.
“Conner and his co-conspirators caused at least 10 other federally insured banks to invest in, or ‘participate in’ the fraudulent loans based on these and other fraudulent misrepresentations, shifting all or part of the risk of default to the other banks,” the news release said. “Conner alone reaped almost $7 million in proceeds from the loans alleged in the indictment.”
Conner and his co-conspirators routinely misled federal and state bank regulators and examiners, federal officials said. They also unsuccessfully sought federal government assistance through the U.S. Treasury Department’s Troubled Asset Relief Program (“TARP”), and engaged in other misconduct in an attempt to avoid seizure by regulators, and prevent the discovery of their fraud.
Regarding the perjury charge, officials said Conner, on Jan. 5, 2011, filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Georgia. He reportedly did so, knowing that he was under federal criminal investigation for his conduct at FirstCity bank.
“Among other misrepresentations and omissions, Conner’s bankruptcy petition stated that he had a little over $3,000 in cash and financial accounts and essentially no un-encumbered interests in real estate,” federal authorities stated. “On Feb. 3, 2011, Conner falsely testified under oath at a bankruptcy hearing in federal court that, among other things, his bankruptcy petition was true and accurate in all respects and that he was ‘down to less than nothing,’ despite having a large liquid reserve several years ago.
“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,” the federal press statement said. “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 in open court on Feb. 3, 2011.”
Conner has remained in federal custody since March 20, 2011, the two-year anniversary of FirstCity Bank’s failure. He was arrested by federal agents at Miami International Airport upon arriving from the Turks and Caicos Islands in the West Indies.
U.S. District Judge Steve C. Jones will determine whether to accept Conner’s guilty pleas. If the judge accepts them, Conner will be sentenced to 12 years in federal prison on all of the charges. He will also be banned from the banking industry for life, forfeit $7 million and pay restitution to the Federal Deposit Insurance Corporation, and to victim banks.
Sentencing is scheduled for Jan. 31, at 10 a.m.