Big Money Borrower Admits Bribing Loan Officer

Allison Tussey —  July 4, 2013 — Leave a comment

Guy Mitchell, 53, Miami, Florida, has pleaded guilty to a charge of conspiring to commit bank fraud and to pay bribes to an officer of a financial institution.

According to the charges and other information presented in court: Mitchell borrowed more than $40 million from the now-failed Integrity Bank in 2005 and 2006, allegedly to finance his interests in various hotels around the country. One of these loans was to acquire and renovate the Casa Madrona Hotel, a luxury property overlooking the water in Sausalito, California. At the plea hearing, the defendant admitted that he was bribing Douglas Ballard, a former loan officer at Integrity, with hundreds of thousands of dollars.

Although Mitchell did use some of the money he received from Integrity for hotel purposes, he never performed any renovations on the Casa Madrona. Instead, he used loan draws to buy a private island in the Bahamas, to travel by private jet, and to pay for Miami Heat tickets, fancy jewelry, expensive cars, and a mansion in Coconut Grove. Mitchell, the bank’s largest borrower, eventually defaulted on his loans, contributing to Integrity Bank’s failure.

Douglas Ballard previously pleaded guilty to conspiracy and tax evasion. Additionally, Todd Foster, another Integrity employee, pleaded guilty to securities fraud.

Mitchell could receive a maximum sentence of 5 years in prison and a fine of up to $250,000, or twice the greater of the gain or loss. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Sentencing is scheduled for October 10, 2013, at 10:00 a.m. before United States District Judge Julie E. Carnes.

United States Attorney Sally Quillian Yates announced the guilty plea.

This case is being investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of Inspector General.

Assistant United States Attorneys Douglas W. Gilfillan and Christopher C. Bly are prosecuting the case.

“Mitchell used millions of improperly obtained loan proceeds to fund a lavish lifestyle,” said United States Attorney Sally Quillian Yates. “His actions corrupted the lending process and jeopardized the safety and soundness of Integrity Bank, which failed and was taken over by the FDIC. Today, Mitchell’s plea of guilty brings this bank fraud investigation and prosecution to a just conclusion.”

“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in announcing Mr. Mitchell’s guilty plea,” said Jason Moran, Special Agent in Charge, FDIC Atlanta Region. “When major borrowers conspire with bank insiders to engage in fraudulent activities that contribute to institution failures, all parties must be brought to justice. The FDIC OIG is committed to ensuring the safety and soundness of banks throughout the country and protecting the Deposit Insurance Fund against such criminal behavior.”

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