Bank executives guiltyPublished 10:19pm Friday, May 24, 2013
A federal jury in Norfolk on Friday handed down guilty verdicts for numerous charges against three top executives and a favored borrower in the Bank of the Commonwealth case.
The guilty verdicts were against Edward J. Woodard, 70, the bank’s former chief executive officer and chairman of the board for more than three decades; Stephen G. Fields, 49, a former executive vice president and commercial loan officer; Troy Brandon Woodard, 36, the son of Edward Woodard who was employed by a wholly-owned subsidiary of the bank as a vice president and mortgage loan specialist; and Dwight A. Etheridge, the favored borrower who owned and operated a residential and commercial development company as well as an employment staffing company.
Each of them faces decades in prison for their fraudulent schemes that ultimately led to the failure of the Bank of the Commonwealth in 2011, according to a press release from the U.S. Attorney’s Office.
“The brazen greed and dishonesty of these four defendants toppled one of Virginia’s largest financial institutions and intensified the impact of the 2008 financial crisis on the public during the height of the fiscal storm,” said U.S. Attorney Neil H. MacBride. “Today’s verdict sends a clear message to top executives and insiders in the financial services industry that those entrusted with the health of our financial institutions will be held accountable when they violate that trust.”
The four overdrew demand deposit accounts to make loan payments, used funds from related entities — at times without authorization from the borrower — to make loan payments, changed terms of loans to make them appear current and extended new loans to cover payment shortfalls.
The bank insiders also provided preferential financing to troubled borrowers to purchase bank-owned properties. In addition, Edward Woodard helped his son renovate his personal residence by making the bank pay the invoices, claiming they were for the bank’s Suffolk branch on West Constance Road.
In November 2008, the bank submitted an application for $28 million from the Troubled Asset Relief Program, but the money was never given because the Federal Reserve’s regulators had concerns about the health of the bank.
From 2008 to its closing in 2011, the bank lost nearly $115 million. It is estimated that the bank’s failure cost the Federal Deposit Insurance Corporation about $268 million.
Edward Woodard was convicted of conspiracy to commit bank fraud, bank fraud, false entry in a bank record, unlawful participation in a loan, and false statement to a financial institution.
Fields was convicted of conspiracy to commit bank fraud, false entry in a bank record, false statement to a financial institution, and misapplication of bank funds.
Troy Woodard was convicted of conspiracy to commit bank fraud and unlawful participation in a loan.
Etheridge was convicted of conspiracy to commit bank fraud, misapplication of bank funds, and false statement to a financial institution.
Each of the defendants is scheduled to be sentenced in September. Each charge carries a maximum penalty of 30 years in prison.
Simon Hounslow, 48, who served as an executive vice president and chief lending officer until the bank closed in September 2011, was acquitted of all charges.