The Federal Deposit Insurance Corp. filed suit last week in U.S. District Court against former directors and officers of Commerce based Freedom Bank, which failed in 2009. FDIC seeks more than $11 million from a dozen defendants it says were grossly negligent in regard to bank loans.
The Commerce bank, which had offices in Jefferson, Banks County and Winder, focused on what the FDIC characterized as risky loans related to commercial land acquisition, real estate and development. The bank failure cost FDIC $48 million.
Defendants listed in the suit include Vince Cater, president and CEO; Bruce Grout, a loan officer; Jim Purcell, senior loan officer; Ronnie Silva, chief operating officer and senior credit officer; and directors Richard Adams, Keith Ariail, Claude Philip Brown, Harold C. Davis, Thomas H. Hardy, Verlin Reece, Don Shubert and Harold L. Swindell. Swindell is deceased.
The FDIC suit alleges that Grout released without authority land held as collateral on a bank loan so the borrower could sell it to pay his income taxes. Grout, the suit said, was a partner with the borrower in a real estate business.
The suit alleges that the bank did not have adequate financial statements from borrowers of 21 particular loans and accuses the defendants of negligence and breach of fiduciary duty.