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No Banking Future for Former First Southern CEO Woody Castleberry

2 min read

Thanks to the fraud of convicted former Little Rock attorney Kevin Lewis, Woody Castleberry will never work in banking again.

Castleberry was the CEO at First Southern Bank in Batesville when it was discovered that Lewis orchestrated a phony improvement district bond scheme that killed the bank — where Lewis was the majority shareholder — and defrauded other Arkansas banks out of millions of dollars.

Castleberry told us last week that his settlement with the Federal Deposit Insurance Corp. was finally approved. He won’t have to pay a penalty, but he agreed never to be involved in banking again.

“I certainly can be blamed for being dumb enough to trust Kevin Lewis, but that’s not a crime,” Castleberry said.

In December, the FDIC reached a $1.69 million settlement agreement with the bank’s other former officers. But nearly all of that money was paid by the bank’s officers and directors liability insurance carrier.

“I can’t own a bank; I can’t be on a board,” Castleberry said. “Frankly, it’s not like I had much of a future in banking anyhow.”

The 62-year-old has been working for White River Health System in Batesville for more than three years and is its managed care coordinator.

Castleberry said that Lewis never contacted him after his crime was exposed in the fall of 2010. The FDIC shut down First Southern in December of that year.

Castleberry said he doubts he’ll ever hear from Lewis again. Lewis was sentenced to 121 months in federal prison after pleading guilty to one count of bank fraud. He also was ordered to pay $39.5 million in restitution to nine banks.

Ponzi Scheme

Castleberry said so much of Lewis’ fraud was done just to keep his Ponzi scheme afloat.

“Every year he had to raise a substantial amount of money to make the annual payments that were due on the [improvement district bonds] that had been issued,” Castleberry said.

“And of course, a big chunk of the money went to people who sold their stock in First Southern Bank. They got that money.”

Lewis’ crimes became a juggling act, and there didn’t appear to be an exit strategy, Castleberry said.

“I don’t know how he thought he was ever going to ever be able to get out from under it,” Castleberry said. “It just doesn’t make any sense to me.”

Lewis, 46, is serving his sentence in the federal prison in Memphis. He is scheduled to be released from the federal Bureau of Prisons in January 2021.

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