A former market president at BB&T conspired with a real estate developer to defraud the bank out of hundreds of thousands of dollars in a scheme that involved issuing multiple loans to the developer’s daughter, a federal jury ruled late last week.
According to the U.S. Attorney’s Office for the Eastern District of Kentucky, Brent Lee was convicted last week of conspiracy to commit bank fraud, two counts of aiding and abetting bank fraud, two counts of misapplication of bank moneys by a bank employee, and four counts of making unauthorized obligations by a bank employee.
Evidence shown during Lee’s trial established what while working as a market president of BB&T in Kentucky, Lee conspired with Paul Fannin, a residential developer, and Chelsea Stone, Fannin’s daughter, to commit bank fraud.
Fannin, who was one of Lee’s major clients, had an outstanding $950,000 loan with BB&T. The loan funds were designated to be used to develop an 8-unit townhome project.
But, in 2014, BB&T officials “became concerned with the pace of progress” of the project, compared to how much money Fannin had received, and downgraded the loan.
Downgrading the loan triggered certain protocols and procedures that Lee and Fannin would be required to follow in order for more money to be released to Fannin.
But, according to court documents, rather than adhere to BB&T’s requirements, Lee suggested to Fannin that they use Stone to get a new loan from BB&T, with the proceeds of the loan going to Fannin instead.
In October 2014, Lee had Stone sign numerous documents in order to receive a $100,00 commercial loan from BB&T. Lee told BB&T that the loan funds were designed to expand Stone’s embroidery business, but Stone did not actually have an embroidery business.
The funds from BB&T were deposited into Fannin’s account instead.
From there, the fraud ballooned into multiple loans subsequently issued to Stone to cover the previous loans.
In November 2014, just one month later, Lee prepared more documents, which Stone signed, to get a new loan to pay off the previous $100,000 loan.
Then, two months after that, Lee had documents prepared, which Stone also signed, to get a new loan that would pay off the November 2014 loan and pay out an additional $149,212.50.
But almost all of this money actually went to Fannin.
Lee then had that loan again extended, in July 2015, just two months before he resigned from BB&T.
According to court documents, of the $250,000 gained in the scheme, Fannin spent at least $120,000 at casinos in the area.
And as a result of the fraud, BB&T lost more than $248,000.
Fannin previously pleaded guilty to conspiracy to commit bank fraud and Lee faces a maximum sentence of 30 years in prison.
