SAVANNAH, Ga. (AP) -- Seven former officers of a failed Savannah bank, including its ex-president, were indicted Friday on bank fraud charges that prosecutors said stemmed from an illegal cover up of bad loans that cost $90 million in deposit insurance.
A federal grand jury returned the indictment against Heys McMath III, the former president of the First National Bank of Savannah, as well as the bank's executive vice president, its chief credit officer and the senior executives over its four branches.
First National Bank was shut down in June 2010, roughly six months after McMath was ousted as president. Prosecutors said illegal actions by him and other officers contributed to the bank's collapse.
According to the indictment, bank officers tried to hide millions of dollars in non-performing loans from regulators as well as the bank's own board of directors. They made illegal loans to unqualified applicants in an attempt to cover interest payments on the bad loans and used false claims to get other banks to fund the loans, prosecutors said.
Ultimately the scheme cost the Federal Deposit Insurance Corp. $90 million, according to prosecutors.
"No matter the complexity of the scheme, bank officers who place FDIC-funds at risk through fraud and other criminal conduct will be brought to justice," Edward Tarver, the U.S. attorney for the Southern District of Georgia, said in a statement.
McMath, 58, did not immediately return a phone message from The Associated Press seeking comment Friday.
Court records did not identify attorneys for McMath or any of the other charged bank executives — Stephen Michael Little, Robert Wilson Dailey, Jay Patrick Gardner, Isaac Jefferson Mulling, Alan Robert Fleming and Jeffrey Allen Farrell.
Georgia has led the nation in bank failures with 84 banks closing since the economic meltdown of 2008.