Pair from Illinois bank in receivership agree to pay penalty, restitution

Officials of a Moline, Ill., bank agreed to an assessment of a civil money penalty (CMP) and an order for restitution, according to the report of enforcement actions for May issued by the federal bank deposit insurance agency.

The Federal Deposit Insurance Corp. (FDIC) reported it issued 14 orders last month, including the actions against the officials of Valley Bank of Moline, which is in receivership.

In its report, the FDIC said Larry C. Henson, formerly of Valley Bank, consented to a restitution order of $40,000. “The FDIC considered the matter and determined that from 2009 through 2013 the Respondent violated certain laws, regulations, or the Valley Bank Consent Order, relating to statutory lending limits and restrictions on loans to borrowers classified as ‘substandard,’” the FDIC said in its order.

Henson is also prohibited from seeking or accepting indemnification from the bank or from any other insured depository institution for the restitution paid under the terms of the FDIC order.

The agency also said that, separately, Robert C. Fick, a former director of Valley Bank, consented to payment of a $15,000 CMP. According to the FDIC, Fick violated the Federal Reserve’s Regulation O (Extensions of Credit to Insiders and Transactions with Affiliates) “concerning certain loans from the Bank to Respondent and his related interests.” The bank incurred no loss on the loans, FDIC noted.

In an unrelated case, the FDIC reported that Roydell Stephens of Washington, D.C., consented to a $1,000 CMP for “reckless unsafe and unsound practices and breaches of fiduciary duty” while serving as a vice president and loan operations and documentation manager at the lndustrial Bank of Washington. The FDIC stated that Stephens“fraudulently issued cashier’s checks from April 30, 2014 to July 23, 2016, resulting in a loss to the Bank.”

Among other actions taken in May, the FDIC reported:

  • Denial of a request to terminate a prohibition against Thomas J. Martin, former chairman and CEO of Gwinnett Community Bank of Duluth, Ga. The agency said Martin failed to present “any evidence or persuasive argument which meets the burden for obtaining consent from the FDIC to become an institution affiliated party” within the banking industry.
  • Approval of five applications from formerly prohibited individuals to participate directly or indirectly in the conduct of the affairs of any insured depository institution. The individuals are: Andrew J.T. McKinnon (of Iowa); Zachary Gerald Stephan (of Georgia); Lynda Lee Dyer (of Florida); Harvey T. Barker, III (of Kansas); and Giovonnia Denise Williams (of Florida).
  • Termination of consent orders against Prairie Mountain Bank of Great Falls, Mont.; and Legacy State Bank of Loganville, Ga.

FDIC Makes Public May Enforcement Actions