GulfSouth Private Bank, Destin, Florida, President Anthony J. Atkins, 51, of Eufaula, Alabama, was convicted March 10, 2017, of conspiracy to commit bank fraud, four counts of false statements to a federally insured financial institution, bank fraud, and mail fraud affecting a financial institution. He was sentenced June 29, 2017, to 63 months in jail and ordered to pay more than $2.4 million in restitution.
GulfSouth Private Bank Vice-President, Bruce A. Houle, 57, of Inlet Beach, Florida, pled guilty to conspiracy to commit bank fraud and one count of false statement to a federally insured financial institution.
This case resulted from a joint investigation by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Deposit Insurance Corporation Office of Inspector General
According to a SIGTARP press release, "In 2007, an individual went to Anthony Atkins, the president of GulfSouth Private Bank, and notified Atkins that the individual’s company, which had been loaned $3.4 million, was no longer going to be able to make payments on the mortgage loans issued by GulfSouth Private Bank that had been
secured by three condominiums. In an effort to conceal that the loans were going into default, and instead of recognizing that the $3.4 million in loans were losses to the bank, Atkins devised a scheme to
conceal the bad debt.
"As a part of the scheme, Atkins and Cobb solicited Houle, Mark W. Shoemaker, Michael Bradley Bowen, and William Blake Cody to take out new loans with the bank to purchase the three condominiums. To persuade Houle, Shoemaker, Bowen, and Cody to engage in the scheme, Atkins and Cobb told these individuals that the loans would be non-recourse, meaning that, if the men defaulted, GulfSouth would have no recourse against them.
"Thereafter, Atkins and Cobb caused new mortgage loans and additional lines of credit to be issued for approximately $3.8 million to the men they had solicited. According to the terms of the fraudulent loans issued during the scheme, the men Atkins and Cobb solicited were not required to make any payments on the loans until the loans came due months down the road. These new loans were then used to pay off the old loans that were going into default. Issuing these new loans and new lines of credit created the appearance that the debt was “performing”, which allowed Atkins to avoid having to report the loans associated with the condominiums as bad debt, as required. Further, as a part of the scheme, Atkins and Cobb caused fraudulent security agreements to be prepared that falsely represented that Houle, Shoemaker, Bowen, and Cody were obligated to repay their respective new
mortgage loans and lines of credit.
"In September 2009, GulfSouth received $7,500,000 in Troubled Asset Relief Program (“TARP”) funds from the United States Treasury. Thereafter, Atkins and Cobb allowed the condominiums that were collateral for the mortgage loans to be sold in short sales, resulting in a loss to GulfSouth. Further, Atkins allowed the deficiencies and the lines of credit to be charged off of GulfSouth’s books and records.
"The bank failed in 2012 with a $36 million charge to the FDIC insurance fund."
GulfSouth Private Bank failure:
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