Frederick E. Vargas, 38, Miami, Florida, was sentenced to 4 years, 3 months in prison to be followed by 3 years of supervised release, and was ordered to pay $2,960,545 in restitution. Vargas was convicted on charges of bank fraud and conspiracy May 7, 2004.

Georgia United States Attorney David E. Nahmias said, "The integrity of federally insured financial institutions must be protected by prosecution of employees who abuse the trust placed in them to honestly conduct the affairs of those institutions."

According to United States Attorney Nahmias and the information presented in court: Vargas was a former Vice President and Business Development and Lending Officer with an institution formerly known as “Charter Bank Trust Company,” which had several offices in the Atlanta area of Georgia.

Vargas used his position to grant loans and credit to applicants he knew were not qualified. The evidence showed that from April 2002 through March 2003, Vargas was induced to approve extensions of credit to uncreditworthy persons in violation of Charter's lending policies. The inducements included the opportunity to purchase real estate at greatly discounted amounts with the representation that the properties could be resold in millions of dollars in personal gain.