One Bank Juggled Bad Penny Stock Loan

by George Waldon  on Monday, Sep. 9, 2013 12:00 am  

Former One Bank & Trust CEO and President Layton "Scooter" Stuart (left), who died March 26; Gary Rickenbach (center), former executive vice president and chief loan officer; and Alberto Solaroli (right) of Jacksonville, Fla.

Rickenbach was let go in February, the last in a string of top executives replaced at the financially challenged bank.

In the memo, Rickenbach describes an elaborate juggling of money through various accounts to keep current the loans that were used to cover the Solaroli loan.

“While too complicated to be enumerated here, after the first year, interest payments on the three loans have for the most part been paid via accounting transfers from the bank,” Rickenbach wrote. “These transfers were requested by me, which resulted in deposits into checking accounts at One Bank that were then used to pay the interest due.

“While no funds left the bank (i.e. unrecognized income offset by payment of interest income), the maintenance of the loans in this manner was improper and did not clearly reflect the true purpose of the loans.”

Another loan to Bartlett’s Ox Investments was used to advance funds to make a principal and interest payment on Stuart’s Crestwood Investment loan, according to Rickenbach. He said this arrangement was misleading and not properly disclosed to the board during the renewal of the Crestwood loan in 2011.

“There is little justification for my actions in this situation, only my desire to resolve a problem loan that I made and was instructed to deal with. No monies from any of these activities were ever used for me personally, but clearly, I have not been fully forthcoming with the details of each loan, and the loans have not been serviced properly.”

Who Knew What?

Stuart’s email indicates he didn’t know the Crestwood Investment loan was actually a one-year agreement, at least initially. The loan was renewed annually until the Crestwood property was sold in two transactions last year in September and November.

The combined sales repaid One Bank in full.

“It was a maze of loan[s] that Heald and Rickenbach refused to explain,” Stuart wrote.

This maze ties in with the 5,328-SF Pleasant Valley home built at the direction of Stuart.

One Bank took possession of the property from Hunter Stuart last month. Ownership was transferred to the bank to settle a lawsuit over the money backing the residence.

 

 

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