This week, it was announced that a Kansas bank executive had been charged in an indictment for his participation in a bank fraud scheme. 50-year-old Troy A. Gregory of Lawrence, Kansas is accused of being involved in a scheme to acquire a $15 million construction loan from 26 banks in Kansas. The indictment alleges that Gregory used false information on the loan documents.
The defendant has been charged with one count of conspiracy to commit bank fraud, two counts of false statements, and four counts of bank fraud. The indictment explains that Gregory worked as a bank executive and loan officer, who made millions in loans to a group of borrowers who were struggling to make loan payments.
The indictment explains that in late 2007 Gregory started the process of making a $15.2 million construction loan to build an apartment complex to the same group. The indictment alleges that Gregory’s bank shared the loan with 25 others. The defendant is accused of making or causing others to make false statements to the banks about the strength of the borrowers, debt status of the property, and the existence of roughly $1.7 million in certificates of deposit for collateral.
Instead of using the funds to build the apartments, Gregory is accused of diverting more than $1 million to pay for a part of the certificates of deposit, to make payments on unrelated loans, and to pay off debt on an apartment property. The other banks would not have participated in the loan without the false promises and representations.
At this point in time, the defendant is innocent until proven guilty beyond a reasonable doubt in a court of law. More details can be found here.