NaplesNews.com on June 11, 2012 released the following:
“By LAURA LAYDEN
FORT MYERS — Once facing fraud charges that could have put him away for life, Jerry Williams, the ex-CEO of Orion Bank in Naples, won’t spend more than 15 years in prison.
Under his plea agreement, he can’t get any more time than that for his crimes.
But he’s asking for a sentence of no more than five years, arguing through his attorneys that when he crossed the line it was an “isolated mistake.”
His sentencing hearing is at 1 p.m. Tuesday in federal court in Fort Myers.
Williams, 52, pleaded guilty to three counts involving bank fraud at Orion, with each count carrying a sentence of up to five years. He faces fines of at least $250,000 and he’s agreed to pay restitution to his victims. Charges in his original 13-count indictment carried a maximum sentence of 220 years in prison.
“Based on the fact he only pleaded to three of the 13 charges I see no reason for any additional leniency,” said Patrick Miller, Orion’s former senior vice president and one of the hundreds of shareholders in Orion’s holding company who lost millions when the bank failed in November 2009.
Williams admitted to orchestrating a complex scheme that involved illegally raising more capital for Orion and selling off bad loans to a borrower to make the failing bank appear in better financial shape than it was to its regulators.
Williams isn’t the only bank executive to find himself in trouble after doctoring financial documents and lying to state and federal regulators. Some of the more recent cases resulted in sentences ranging from a few months to more than six years in prison:
** In late 2011, a former Georgia banker was sentenced to six years in federal prison for a scheme that netted him kickbacks for fraudulent loans made to a Florida real estate developer. On top of his sentence, banker S. Pope Cleghorn Jr., the former president and CEO of Hometown Bank, had to pay more than $2.5 million in restitution to SunTrust, which acquired the bank after its collapse in 2008.
** Earlier this year, Mary S. Becker, a former vice president of Jersey State Bank in Illinois, was sent to prison for five years and three months for bank fraud and ordered to pay restitution after siphoning $4.45 million from the bank, putting it into her accounts.
** About a year ago, William Sandison, the former CEO of Community National Bank in Minnesota, got a four-month prison sentence and had to pay a $30,000 fine after he pleaded guilty to defrauding nearly two dozen other banks that invested millions of dollars in a failed town center project.
** A little more than two years ago, David Kennelly, a former executive with the Bank of Clark County in Washington, was sentenced to four months in prison after he hid appraisals on 17 properties that had fallen in value. Based on the appraisals, regulators would have required his bank to set aside nearly $17 million in reserves for loan losses.
** In late 2010, Jeffrey Thompson, former president of Hume Bank in Missouri, got a 6-and-1/2-year prison sentence after admitting he concealed problem loans from regulators and altered records. Loan losses caused the bank to fail in March 2008.
Peter Turecek, a senior managing director in the New York office of Kroll, a leading risk consulting company, said though plea deals can often result in lighter sentences for the accused, there are benefits to others. There doesn’t have to be a costly trial, saving taxpayer money, and it keeps the courts from getting clogged.
If Williams went to prison for life he wouldn’t be able to pay restitution, Turecek noted.
Bank fraud often doesn’t involve hardened criminals, he said.
“They are people who probably went into it with a high ideal and a desire to run a business and somewhere along the way something came up and when faced with an ethical decision or hard decision they made the wrong choices,” he said. “Then they tried to continue to cover it up, which led to more lies.”
Fred Gibson, deputy inspector general for the Federal Deposit Insurance Corp. and a bank regulator, said his office has 210 open investigations and about half of those cases involve allegations of criminal activity against bank officials.
Some think there hasn’t been enough prosecution of bankers.
“The general feeling of a lot of people is that with this current crisis there weren’t enough put in jail,” said Ken Thomas, a Miami-based economist and independent banking consultant. “There is a public sentiment out there that ‘How could we have this terrible crisis with so many losses and very few people going to jail?'”
In the case of financial fraud, a judge needs to look closely at the victims and consider how they’ve been hurt, he said.
“You’re not talking about a lost life or someone who has lost a leg, or who is injured for life or paralyzed,” Thomas said. “But financial disaster can also ruin lives. They cause relationships to break up, foreclosures, lost homes, lost businesses.”
Williams’ co-conspirators already are serving time in federal prison and will have to pay restitution to the Federal Deposit Insurance Corp., which lost $844 million when Orion failed. Their sentences ranged from two years to 5-and-1/2-years.
Nicole Waid, the federal prosecutor in the Orion case, wrote in a memorandum to the judge that Williams “clearly had the most to gain financially” from the fraud. He owned 24 percent of Orion Bancorp’s stock and was the largest single shareholder.
In 2009, Williams reported a net worth of about $78 million, but if his bank had failed at that time and his stock had become worthless his net worth would have dropped to $65,000, according to the court filing.
Waid’s recommending the court not go easy on Williams.
In a motion for a lighter sentence, Williams’ attorneys paint him as a community leader, a family man, a philanthropist, a caring employer. Attached to the motion are letters from his wife, Heather, and other supporters.
“He offers neither excuses nor qualifications,” his attorneys wrote. “And yet the facts of this case compel one to recognize it for what it is: a critical aberration from an otherwise exemplary life and career.””
Douglas McNabb – McNabb Associates, P.C.’s
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