Law firm, 2 attorneys sued by FDIC, accused of helping bank make $82M in illegal loans
Posted Apr 18, 2013 07:42 pm CDT
The Federal Deposit Insurance Corp. has sued a Florida law firm and two of its attorneys, contending that they failed to take note of “glaring red flags” when representing Orion Bank in making $82 million in illegal loans in 2009.
Nason, Yeager, Gerson, White & Lioce, as well as a partner and a former associate who is now with another law firm, are named as defendants. They are accused in the suit of helping Orion with a loan transaction that they knew was illegal, because it involved using some of the loan money to purchase stock in the bank, the South Florida Business Journal reports.
Filed last month in federal court in Fort Myers, the malpractice suit seeks $31 million in damages from the defendants, which the feds say was the amount the bank lost on the loans.
Also at issue is whether the loans exceeded the bank’s lending limits to a single individual, Francesco Mileto. Lending documents indicated the money went to companies the FDIC says he controls, the article continues.
“Defendants should have known that these loans were in fact the center of a conspiracy among the bank’s officer to manipulate the bank’s accounting, deceive the bank’s board of directors and board loan committee, evade Florida’s legal lending limit, and illegally finance the purchase of stock in the bank’s own holding company,” argues the FDIC in its complaint.
Attorney Jonathan Vines, of Cole, Scott & Kissane represents the law firm. He says his clients “strongly deny all allegations of wrongdoing,” but cannot comment in detail because of the pending case.
Mileto and a former CEO of the bank were previously criminally convicted in bank-fraud cases.
Herald-Tribune: “Borrower agrees to plead guilty in Orion Bank fraud case”
South Florida Business Journal: “Ex-Orion Bank CEO Williams sentenced to six years in prison”