Arkansas Banker Charged in Fraud Conspiracy with Northport Farm Credit Manager
BIRMINGHAM – Federal prosecutors today charged an Arkansas man with conspiring with the branch manager of a Northport farm credit institution to profit from fraudulent loans, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Patrick J. Maley.
A one-count information filed in U.S. District court charges ROGER D. SANDERS, 44, with conspiracy to commit bank fraud. He is charged with conspiring with Gregory T. Smith to defraud First South Farm Credit in Northport of $271,190 by creating false loans. Sanders kicked back $107,780 of that amount to Smith, according to the charges. Along with the information, prosecutors today filed an agreement with Sanders to plead guilty to the conspiracy charge.
In March, prosecutors charged Smith, 36, of Tuscaloosa, with four counts of defrauding First South Farm Credit of about $1.9 million between 2007 and 2010. Smith pleaded guilty to the charges April 25. Those $1.9 million in fraudulent loans do not include the false loans to Sanders.
“This community farm credit took a hard hit from a scheme designed to personally enrich two bankers,” Vance said. “This type of fraud undermines our financial system and damages our communities. We remain committed to prosecuting financial crimes,” she said.
“The citizens of north Alabama should know that the FBI is working together with our partners to ensure integrity in the financial services industry, and that those involved in criminal activities that undermine that integrity will be held accountable,” Maley said.
The conspiracy charge against Sanders and his plea agreement describe his loan fraud as follows:
Sanders was an employee of an Arkansas bank where Smith was a customer. Smith also was the branch manager of the First South Farm Credit. Between May 2009 and April 2010, the two men conspired to do financial favors for one another through the use of fraudulent loans issued from First South. Smith created false loan documents, sometimes using the names of relatives of Sanders.
Sanders directed loan checks from First South Farm Credit be deposited into his account at a Northport credit union. He also directed an employee at the credit union to draw checks payable to Piney Woods Holdings, which was owned and controlled by Smith. The payments to Piney Woods Holdings represented substantial portions of the First South fraudulent loan disbursements, and Sanders kept the remainder of those loan proceeds for himself.
The maximum sentence for bank fraud conspiracy is 30 years in prison and a $1 million fine.
The case is being investigated by the FBI. Assistant U.S. Attorney Pat Meadows is prosecuting the case.
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The Office of U.S. Attorney
Joyce White Vance
Natural Disaster Fraud Hotline
Members of the public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the Hotline, toll free, at (866) 720-5721 or the Disaster Fraud e-mail at firstname.lastname@example.org. Please see the News Release Justice Department Officials Raise Awareness of Disaster Fraud Hotline