One Bank Sues Insurance Company, Seeking $2M

by George Waldon  on Friday, May. 9, 2014 7:32 am  

One Bank & Trust of Little Rock (Photo by Lance Turner)

One Bank & Trust has tried unsuccessfully to collect $2 million on its financial institution bond, and now the Little Rock lender has gone to federal court with its grievance against the Travelers Indemnity Co., an affiliate of St. Paul Mercury Insurance Co.

The Minnesota insurer refused to make good on the bond claim despite repeated requests and submissions of documents, according to the complaint.

Among other things, the bond covers "dishonesty of employees."

One Bank submitted seven loss claims related to the alleged actions of the late Layton "Scooter" Stuart, former owner, chairman and CEO of the bank; Tom Whitehead, former chief financial officer; and Matthew Sweet, former vice president and controller.

The common theme is self-dealing that cost the bank. 

Sweet allegedly diverted $114,264 from One Bank for his personal benefit and was terminated in February 2012. (He's also been charged with 60 counts of bank fraud and money laundering and is scheduled for trial before U.S. District Judge Leon Holmes starting June 23.)

Also in the mix are Whitehead's condominium on Lake Ouachita, the Pleasant Valley home that Stuart built for his son, a Dallas condo, phantom improvements to the bank's Verizon Arena suite and misappropriation of a settlement for alleged overbilling by Thinc Marketing Group.

(Thinc isn't named in the complaint but is only referred to as a Little Rock-based firm that provided marketing services to One Bank.)

Last, but certainly not least, among the incidents is Stuart's tapping of the bank-owned life insurance and other life insurance assigned to One Bank for cash. These borrowings were allegedly illegal.

In addition to the $2 million, One Bank is seeking $240,000 for Travelers' failure to pay on the claims in a timely fashion.

 

 

Please read our comments policy before commenting.