Federal Probe Includes 5 Former One Bank Executives

by George Waldon  on Monday, Feb. 18, 2013 12:00 am  

IRS and FBI agents executed a search warrant at the Little Rock home of Layton “Scooter” Stuart on Feb. 6.  (Photo by Mark Friedman)

Layton “Scooter” Stuart, the former chairman, president and CEO of One Bank & Trust, isn’t alone in receiving attention as part of a criminal investigation into the financial dealings at the Little Rock bank.

At least five other former One Bank executives are included in the probe that sent IRS and FBI agents to Stuart’s west Little Rock home on Feb. 6, according to a source familiar with a forensic audit ordered last year by the Office of the Comptroller of the Currency.

How the bank’s former leadership used $17.3 million in TARP funds is drawing special scrutiny, the source said.

Jerry Pavlas, One Bank’s new president and CEO, confirmed that the audit was the basis of the investigation but was less specific about details under investigation.

“The investigation is against individuals who have left the bank,” said Pavlas, who was hired as Stuart’s replacement in October. “It’s not about the bank or anyone still at the bank. The forensic report is done, and it’s all about the individuals in the forensic report.”

No former One Bank executives are currently under indictment. However, Andrew Melton, who was hired by Stuart as a bank consultant in August, was indicted on 12 counts of mail fraud in an unrelated case on Feb. 6, the same day Stuart’s Hickory Creek mansion was raided.

Melton was re-tained by Stuart to help One Bank comply with the prompt corrective action ordered by the OCC.

Worthen Alumni

Melton, who served as executive vice president and CFO at Little Rock’s Worthen Banking Corp. earlier in his career, worked as a One Bank consultant for about only three months.

“When I got here in October, his consulting arrangement was terminated,” said Pavlas. “When I came in, his services were no longer needed, and the board agreed.”

Melton is among a group of five Worthen alumni who once worked together and later drew a paycheck from One Bank. He and three others are no longer employed by the bank as regulatory scrutiny of its loan operations intensified.

The first to go was Kelly Harbert, who was fired as senior vice president and commercial loan officer on June 3, 2010. She was ultimately sentenced to 30 months in federal prison and ordered to pay $441,912 in restitution after pleading guilty to bank fraud, money laundering and using someone else’s Social Security number to make fraudulent loans for her own benefit.

 

 

Please read our comments policy before commenting.