Ex-bank president sentenced: year in prison for 3 million fraud case!

Ex-bank president sentenced: year in prison for 3 million fraud case!

Alan Childs, the former market president of Morris Bank in Gray, was sentenced to a year and a day in prison after pleading guilty to taking part in a fraudulent loan scheme. The sentence, handed down Monday, also includes a $10,000 fine and three years of post-prison supervision. This penalty is part of a comprehensive investigation that uncovered the collaboration between Childs and Ronnie Atkinson, one of his clients, to fraudulently withdraw over $3 million from the bank.

The fraudulent activity began in 2019 when Childs informed Atkinson that he had reached the $500,000 maximum credit limit he could approve per customer. Childs had the authority to make loans of that amount, while amounts above that limit had to be approved by a senior loan officer. To get around the problem, Childs suggested that a family member take out a loan for Atkinson. This approach opened up the opportunity for Atkinson to use relatives and friends as straw loans for his loan applications, which ultimately resulted in massive fraud.

The discovery of fraud

In March 2021, the bank's loan servicing officer reported to Childs that the customer relationship with Atkinson had exceeded the credited limit. Further investigation revealed that there were $1.6 million in loans associated with Atkinson in addition to the original loans. Despite this alarming discovery, Childs defended the transactions, arguing that the loans were independent and had their own sources of repayment. However, he continued to extend loans to Atkinson's acquaintances even though they had pre-existing payment problems.

Atkinson also admitted conspiracy to commit bank fraud and aggravated identity theft charges on May 12. The intensity and complexity of the fraud caused significant concern within Morris Bank. Childs’ actions and the threat to the financial system contribute to the significant disparity that prevails in the banking sector.

The situation highlights the challenges banks face in preventing fraud and maintaining internal controls. The consequences for both parties involved are serious and underscore the need for stricter policies and monitoring measures in the financial industry to prevent future incidents of this nature.

It remains to be seen what further steps Morris Bank will take to regain the trust of its customers and ensure that such fraudulent activity does not occur again in the future.

For more information read at Daily Hodl.