[1]A former branch manager of an Alabama bank that received assistance through the government's Troubled Asset Relief Program (TARP [2]) was sentenced after pleading guilty to fraud, Special Inspector General for TARP (SIGTARP [3]) announced recently.
Phillip Owen, 36, of Selma, Alabama, pleaded guilty to one count of conspiracy to commit bank fraud and was sentenced to six months in federal prison, after which he must serve six months of community confinement as a special condition of five years of supervised release. Owen was ordered to pay $217,540 in restitution.
Court documents show that Owen, while working as a branch manager for Superior Financial Services in Attalla, Alabama, from September 2007 to May 2009, approved and/or recommended approval for loan applications containing false information from bank customers. According to the court records, Owen's illegal actions included overvaluing vehicles that were the subject of loan applications, disbursing loan proceeds to individuals who were either not entitled to the proceeds or not involved in the loan transaction, and prematurely releasing loan collateral. Owen then approved the loans despite not having verified the loan applicants' information even though he knew he hadn't done so, and recommended the approval of further loans. According to the courts, Owen was occasionally compensated with narcotics for approving fraudulent loans.
Owen approved loans for bank customers that would not have otherwise qualified for those loans, and often the amounts of the loans exceed the amount of collateral that was put up to secure them. Superior was forced to write off more than $217,000 as a result of Owen's actions.
The parent company of Superior Bank and Superior Financial Services, Superior Bancorp, Inc., headquartered in Birmingham, received $69 million in relief from federal taxpayer funds through TARP in December 2008. SIGTARP reported that the relief money Superior received was never repaid.
"Owen, while a bank manager for Superior Financial Services, a bank that had been bailed out by taxpayers through TARP and which later failed, paid for his narcotics using bank dollars," said Christy Romero, SIGTARP. "In exchange for his narcotics, Owen approved bank loans knowing that customers had falsified the loan applications, and he often inflated the loans beyond the value of the underlying collateral. Owen’s fraud caused the bank to suffer more than $217,000 in bank losses. TARP was designed to stabilize banks and our financial system during a time of crisis, not to finance crime. SIGTARP and our law enforcement partners will track down those guilty of exploiting taxpayers’ TARP investments and ensure that justice is served for their crimes."
The announcement of Owen's sentencing was made by Romero and Joyce White Vance, U.S. Attorney for the Northern District of Alabama. The sentencing hearing was presided over by District Court Judge Virginia Emerson Hopkins in a federal court in Birmingham.