UPDATE 2: Filing Chapter 7, Kelly Harbert Hit With 20-count Indictment

by Arkansas Business Staff  on Thursday, Jun. 9, 2011 10:06 am  

Kelly Harbert, shown in a file photo

A federal grand jury on Wednesday indicted former One Bank & Trust vice president and loan officer Kelly Harbert of Little Rock on 20 counts connected to an alleged scheme to defraud various financial institutions.

The charges include 17 counts of bank fraud, two counts of money laundering and one count of aggravated identity theft. (An earlier version of this story, based on a press release from the U.S. Attorney's office, said Harbert was charged with 22 counts, but the actual indictment lists only 20.)

According to the indictment, Harbert, 45, who recently filed for Chapter 7 bankruptcy protection, devised the scheme while working for One Bank & Trust. The indictment says Harbert borrowed money from One Bank and six other banks by using the personal information of her parents and customers to originate loans that she converted to her own use.

The indictment lists 17 loans totaling $577,749 made between March 2007 and May 2010. Of that, $277,600 came in the form of seven loans from One Bank. She borrowed $135,000 in four loans from Regions Bank and $50,000 in two loans from Summit Bank.

She allegedly made one fraudulent loan from each of four other banks: Centennial Bank, $50,000; Eagle Bank, $30,000; IberiaBank, $20,099; and BankcorpSouth Bank, $15,050. 

Harbert allegedly deposited money fraudulently obtained from One Bank into an account at IberiaBank and then transferred it into another IberiaBank account, which the grand jury said constituted money-laundering.

The maximum penalty for bank fraud is not more than 30 years in prison and up to a $1 million fine or both with five years supervised release. The maximum penalty for money laundering is up to 10 years in prison and a fine of $250,000 with three years supervised release. 

The aggravated identity theft charge adds a mandatory minimum prison sentence of two years to any sentence received, a fine of not more than $250,000 or both and one year of supervised release.

ArkansasBusiness.com reported first word of the alleged fraud in June 2010, just days after One Bank confronted Harbert and fired her. One Bank filed suit to recover the funds, saying Harbert admitted to bank executives that shehad been "under severe financial difficulties" and the funds were used to pay loans at other banks.

The lawsuit also said that Harbert admitted that two $50,000 loans made in the names of her parents were for her benefit and made without her parents' knowledge or consent.

Since then, other financial institutions and creditors have sued Harbert, including Centennial Bank of Conway, alleging that Harbert filed false documents in April 2007 for a $50,000 loan in the name of Barbara Givens, her mother.

Bankruptcy

 

 

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