Man Admits Altering Loan Due Dates and Interest for his Personal Benefit

Allison Tussey —  October 29, 2010 — Leave a comment

Jeffrey W. Thompson, 40, Hume, Missouri, the former president of Hume Bank, Bates County, Missouri, pleaded guilty in federal court to making false statements to the FDIC as part of a bank fraud scheme that caused such significant losses that the bank was pushed into insolvency. Thompson pleaded guilty before U.S. Magistrate Judge Sarah W. Hays to the charges contained in a December 1, 2009, federal indictment.

Thompson became president of Hume Bank in 2001. From January 1, 2004, through August 31, 2007, when he left the bank, Thompson concealed problem loans from state and federal bank examiners. Due primarily to loan losses on loans originated and administered by Thompson, in which he masked past due loans by altering loan maintenance records, the bank became insolvent and was closed by the Missouri Division of Finance on March 7, 2008. In order to meet obligations to depositors, the FDIC insurance fund sustained a loss of $4,324,463.

Thompson admitted that he masked past due loans by altering loan maintenance records. For example, past due principal was reduced to zero in 1,584 instances, past due interest was reduced to zero on 1,460 occasions, and 1,445 maturity dates were changed on the loan maintenance reports. The great majority of these changes were not supported by loan modification agreements in bank files. Thompson personally made the majority of the changes. The false loan maintenance reports concealed problem loans from state and federal bank examiners and from the bank’s board of directors.

Thompson also completed false Officer’s Questionnaires, by falsely stating that the bank had no accommodation loans, or nominee loans, and by falsely stating that the bank had no instances of capitalized interest. In truth, Thompson had made accommodation, or nominee loans, to relatives from which he personally profited, and had made loans which capitalized interest.

By pleading guilty, Thompson agreed to forfeit to the government $300,000, which represents proceeds from the fraud scheme, or his residential property.

Under federal statutes, Thompson is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Beth Phillips, United States Attorney for the Western District of Missouri, announced the guilty plea.

This case is being prosecuted by Assistant U.S. Attorney Kate Mahoney. It was investigated by the Federal Deposit Insurance Corporation and the Federal Bureau of Investigation.

 

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Allison Tussey

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