GAINESVILLE, GA—MITCHELL C. SIMPSON, 42, of Cornelia, Georgia, has been indicted and made an initial appearance before United States Magistrate Judge Susan S. Cole in Gainesville on charges of making and conspiring to make false statements to Community Bank & Trust (CB&T), a federally insured financial institution, which failed in January 2010.
United States Attorney Sally Quillian Yates said of the case, “Bank fraud and bank failures have had a devastating effect on many of our communities, and those responsible go well beyond the people who work at the bank. In this case, the indictment alleges that a major bank customer used his relationships with those who ran a bank to bail him out of his personal money problems. The victims of this alleged scheme include other honest bank customers who lost their main financial institution when the bank ultimately failed.”
According to United States Attorney Yates and other information presented in court: SIMPSON owned “Universal Chevrolet” in Cleveland, Georgia. SIMPSON and his dealership owed millions of dollars to CB&T on various loans, which they could not repay. SIMPSON and his dealership were precluded from obtaining additional loans because the amount of their existing loans exceeded CB&T’s lending limits. Therefore, in order to obtain funds to keep his failing dealership afloat, between April and June of 2009, SIMPSON allegedly recruited eight individuals to obtain new loans on his behalf. These individuals (“the straw borrowers”) were either employed by SIMPSON’S dealership or were related to someone who was employed by the dealership.
The indictment alleges that, at SIMPSON’S direction, the straw borrowers applied for loans at CB&T in their own names and knowingly made false statements in loan applications, promissory notes, and other documents for the purpose of influencing the action of CB&T in connection with their loans.
The indictment further alleges that ROBERT RANDAL JONES, who was employed by CB&T as executive vice-president and chief credit officer, used his position at CB&T to secure loans for the straw borrowers totaling $925,000, knowing that the loan proceeds would be funneled back to SIMPSON. JONES was sentenced two weeks ago by United States District Judge William C. O’Kelley to serve 10 years in federal prison for his part in a broader conspiracy to defraud CB&T. Three other individuals were also sentenced for conspiring with JONES to defraud the bank.
When the loans were funded for the straw borrowers, the straw borrowers immediately relinquished control of the loan proceeds to SIMPSON. The indictment alleges that SIMPSON then paid each of the straw borrowers $2,500 as a fee for helping him defraud the bank.
The indictment charges SIMPSON with one count of conspiracy to make false statements to a federally insured financial institution, and two counts of making false statements to a federally insured financial institution. SIMPSON faces a maximum sentence of five years in prison and a fine of up to $250,000 on the conspiracy charge and a maximum sentence of three years in prison and a fine of up to $1,000,000 on each of the other counts. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by special agents of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of Inspector General.
Assistant United States Attorney Russell Phillips is prosecuting the case.