SAVANNAH, Ga. — Seven former officers of a failed Savannah bank, including its ex-president, were indicted Friday on bank fraud charges that prosecutors said stemmed from an illegal cover-up of bad loans that cost $90 million in deposit insurance.
A federal grand jury returned the indictment against Heys McMath III, the former president of the First National Bank of Savannah, and the bank’s executive vice president, its chief credit officer and the senior executives over its four branches.
First National Bank was shut down in June 2010, roughly six months after McMath was ousted.
According to the indictment, bank officers tried to hide millions of dollars in nonperforming loans from regulators as well as the bank’s own board of directors. They made illegal loans to unqualified applicants in an attempt to cover interest payments on the bad loans and used false claims to get other banks to fund the loans, prosecutors said.
McMath, 58, did not immediately return a message seeking comment Friday.
Court records did not identify attorneys for McMath or any of the other charged bank executives – Stephen Michael Little, Robert Wilson Dailey, Jay Patrick Gardner, Isaac Jefferson Mulling, Alan Robert Fleming and Jeffrey Allen Farrell.
Georgia has led the nation in bank failures with 84 banks closing since the economic meltdown of 2008.