FDIC Fines Former RiverBank Loan Officer Over $88K Embezzlement Case

RiverBank of Pocahontas was victimized in an embezzlement plot that led to a guilty plea by a former loan officer in 2023. (Google Maps)

A former loan officer at RiverBank of Pocahontas was ordered to pay a $35,000 fine by the Federal Deposit Insurance Corp. in November, ending a years-long case involving his embezzlement of nearly $88,000 of clients’ money.

Bryan E. Dalton, 35, also is prohibited from participating in the banking industry without first getting approval from the FDIC.

The FDIC’s board found that Dalton “engaged in unsafe and unsound banking practices and breaches of fiduciary duties for which the Bank suffered financial loss.” The FDIC also said that Dalton’s “actions involved personal dishonesty and willful and continuing disregard for the Bank’s safety and soundness.”

In October 2023, Dalton pleaded guilty in Randolph County Circuit Court to four felony theft of property charges in connection with the thefts. He was sentenced to four years of probation and ordered to pay $87,951 in restitution.

His crime dates back to 2019, when he was a loan officer at RiverBank in Pocahontas. Dalton “planned, implemented, and attempted to cover up a scheme” where he took the money from the accounts of four loan customers while helping them through the bank’s loan approval process, according to an order from the FDIC dated Nov. 20.

Dalton was fired from the bank on Aug. 6, 2019.

“Upon discovering the misappropriation of funds, RiverBank immediately moved to ensure that no customers were harmed,” Kyle Baltz, president and CEO of the bank, said in a statement to Arkansas Business. “From there, the bank was supportive and complied with its legal and regulatory requirements. We believe the process worked and that justice was served.”

Arkansas Business’ attempts to reach Dalton for comment on this story before press time were unsuccessful last week.

Joining the Bank

Dalton served in the Marines from 2007 through 2011 before he joined the bank in 2014, according to his LinkedIn profile.

Dalton’s duties at the bank included helping customers obtain agricultural loans.

When a loan needed collateral, such as an U.S. Department of Agriculture Farm Services Agency guarantee, Dalton helped the customer obtain FSA approval.

But Dalton “deceived the Bank about the FSA guarantees and the four borrowers about his actions while diverting funds from the borrowers’ account to his own account at another bank,” according to the FDIC filing.

Dalton had created a company called FSAEV, where he put the customers’ money.

In June 2019, the bank’s loan operations manager was doing routine document reviews for new loans and discovered that some of Dalton’s loans were missing the evidence of the FSA guarantees. The manager also discovered that fees had been paid to FSAEV. Baltz was alerted about the missing documents and asked Dalton for them.

Dalton submitted filings that appeared to be FSA conditional guarantees, but those turned out to be “fraudulent,” the FDIC said.

Bank officials then learned that nearly $88,000 had been taken from customers’ accounts. The bank and its insurance company covered the losses to the customers’ accounts.

Dalton later met with bank officials and wrote a check from his FSAEV account for the losses. But when the bank tried to cash the check, it learned that the FSAEV account had insufficient funds and had been closed.

In August 2023, the FDIC announced that it would hold a hearing on Sept. 26, 2023, at the federal courthouse in Little Rock concerning the matter. It was the first time the FDIC had held a hearing in Arkansas in recent memory.

Days after the two-day hearing, Dalton pleaded guilty to the state court charges. His guilty plea “contradicted some of his testimony given at the administrative hearing,” the FDIC said.

The FDIC’s board found that Dalton’s actions “constituted unsafe and unsound practices that are contrary to generally accepted standards of prudent operation.”