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Thursday, February 25, 2016

Former President and CEO of Georgia-Based Bank Sentenced to 84 Months in Prison for Role in Bank Fraud Conspiracy

A former president and CEO of a Georgia-based bank was sentenced today to 84 months in prison for his role in a conspiracy to commit bank fraud and major fraud against the United States. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia made the announcement. 

Gary Patton Hall Jr., 50, of Tifton, Georgia, was sentenced by Senior U.S. District Judge Hugh Lawson of the Middle District of Georgia.  In addition to imposing the prison term, Judge Lawson ordered Hall to pay $3,931,018 in restitution to the bank and federal agencies for losses suffered.  In December 2015, Hall pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit major fraud against the United States.

According to court documents, Hall was the president and CEO of Tifton Banking Company (TBC) from August 2005 until June 2010.  As part of his guilty plea, Hall admitted that he engaged in a scheme to mislead the bank and its loan committee about loans that TBC made to local individuals and businesses.  Hall hid past-due loans from the Federal Deposit Insurance Corporation (FDIC) and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking, he admitted.   Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.

At his plea hearing, Hall admitted that in certain transactions in which he exercised approval authority, he made false representations about the loans to TBC’s loan committee and hid his personal and business interests, including approving loans to the buyer of a condominium in Panama City Beach, Florida, owned by Hall himself.  Hall admitted that he hid the loans from the FDIC and state regulators when the buyer’s payments became delinquent, and that he received $50,000 profit from the sale of his condo.  The buyer eventually declared bankruptcy, resulting in a loss of more than $400,000 to TBC.

Hall also admitted to making fraudulent representations that led to commercial loan guarantees being issued by the U.S. Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) on two other loan transactions.  The loans were made by TBC and guaranteed by the government agencies to refinance earlier non-performing commercial loans made by TBC as part of the scheme to mislead bank regulators and hide the bank’s true financial condition.  Those guaranteed loans resulted in more than $2 million in losses to the bank and the agencies.

In November 2010, the Georgia Department of Banking and Finance closed TBC because of its poor financial condition.  At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program (TARP). 

The FBI, the Special Inspector General for TARP, the SBA’s Office of the Inspector General, the FDIC Office of the Inspector General, the USDA’s Office of Inspector General and the Tifton County Sheriff’s Office investigated the case.  Senior Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia prosecuted the case.

Financial Fraud
Updated August 10, 2016