Former Bank Executives Sentenced to Prison for Bank Fraud

On June 12, 2018, a U.S. District Court in Oregon sentenced the former CEO and CFO of a now-defunct Oregon-based bank to serve 24 and 18 months in prison, respectively, for falsifying bank entries, reports, and transactions.

In November 2017, the two Portland-area bank executives were convicted of one count of conspiracy to commit bank fraud and 12 counts of making a false bank entry, after allegedly falsifying bank record entries in order to hide bad loans.  The U.S. Attorney for Oregon claimed that the executives “concealed the true financial condition of the bank to regulators and the board of directors by falsely reporting” that:

• The bank had title to a property in a straw buyer transaction;
• Delinquent loans had been paid, and
• Certain bank-owned property had been sold.

At sentencing, the judge noted that the terms he imposed were significantly lighter than those suggested in the prosecutors’ advised sentencing proposals, which for the CEO was approximately 9-11 years, and for the CFO was approximately 7-9 years.

In addition to the above-described prison sentences, the executives will also pay financial penance for their behavior—a forfeiture and restitution hearing has been scheduled for August 7, 2018.