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Orion Bank President, Jerry J. Williams Guilty of Bank Fraud

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Guest SIGTARP

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and U.S. Attorney for the Middle District of Florida Robert E. O’Neill today announced that Jerry J. Williams (51), formerly of Naples, Florida, and currently residing in Fort Worth, Texas, pleaded guilty today to conspiracy to commit bank fraud and making false statements to federal regulators. Williams faces a maximum penalty of 15 years in federal prison. A sentencing date has not yet been set.

 

"Williams is another senior bank executive being held criminally responsible for his actions in a fraud that contributed to the financial crisis," said Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program. "As the President, CEO, and Chairman of Orion Bank, Williams fraudulently conspired to have the bank survive the economic downturn by creating the illusion that non-performing loans were performing. Thousands of banks faced losses during the financial crisis without turning to fraud. Anyone looking for a bailout from TARP who engaged in criminal fraud will be brought to justice by SIGTARP and its partners in law enforcement."

 

Orion Bancorp, Inc., the parent company of Orion Bank, unsuccessfully sought $64 million in federal government assistance through the U.S. Department of the Treasury’s Troubled Asset Relief Program (TARP).

 

According to the plea agreement, Williams, the former President of Orion Bank, participated in a conspiracy with top Orion Bank executives, Thomas Hebble (former Executive Vice President), Angel Guerzon (former Senior Vice President), and former Orion Bank borrower, Francesco Mileto, to mislead state and federal regulators that Orion Bank was in a better capital position than it was in truth and fact. The conspiracy had two objectives: 1) to finance the sale of promissory notes secured by mortgages held by Orion Bank on distressed properties, thereby creating the illusion that non-performing loans were performing loans, and 2) to conceal the financing for the sale of Orion Bancorp, Inc. stock to Mileto, thus creating the illusion of a legitimate capital infusion into the bank. The conspirators accomplished these objectives by falsifying the books and records of Orion Bank and deceiving state and federal regulators over a period of seven months, from May 2009 until November 13, 2009.

 

As part of the scheme to defraud, Williams directed Hebble and Guerzon to increase loans-in-process to nominee entities associated with Mileto, to $82 million, including a $26.5 million line of credit. Within the lines of credit, Williams concealed $15 million of financing for Mileto's purchase of Orion Bancorp, Inc. stock, despite knowing that banking laws and regulations prohibited the bank from financing the purchase of its, or its affiliates', own stock. The loans closed on June 29, 2009, the end of the banking

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