A former official with First National Bank on Thursday was sentenced to 38 months in federal prison for his role as what prosecutors said was the “executioner” for former bank president Heys Edward McMath III in a fraud that took the bank down in 2010.
Alan Robert Fleming, 38, also must pay almost $4 million in restitution and serve a three-year supervised release term after his custody time, U.S. District Chief Judge Lisa Godby Wood ruled.
“You have done good in your life and will in the future,” Wood told Fleming in imposing sentence.
Fleming was city president of the Tybee Island branch and a commercial loan officer until he was forced out. He pleaded guilty to two counts of bank fraud on Jan. 21. He was the youngest defendant and the last sentenced over three days.
The restitution will be paid as his share along with McMath and co-conspirator developer Richard Guerard who earlier pleaded guilty and is serving a prison term.
McMath, president/CEO, was sentenced on Tuesday to three-and-a-half years in federal prison for his role as head of the scheme.
First National Bank closed its doors and was taken over by the government in the summer of 2010, largely because of troubled loans orchestrated by the seven defendants in the most recent indictment.
First Assistant U.S. Attorney James Durham told Wood on Thursday the government considered Fleming right behind McMath in heading the scheme.
“Mr. McMath was the architect. (Fleming) was the executioner,” Durham said, identifying his criminal conduct included forged documents, thefts from the bank and obstruction of a federal regulator’s investigation.
Fleming “almost on a daily basis was committing a crime and causing horrendous loses to a community bank here in Savannah.”
He outlined a series of what he called lies and forgeries by Fleming as part of a scheme in 2008 he said cost the bank by repeatedly misrepresenting the appraisal from $5 million to $7.9 million.
But, Athens attorney Ed Tolley argued his client “certainly wasn’t calling the shots.”
“I think it’s nuts the way they were acting,” he told Wood.
He said Fleming was 24-years-old, naïve, and “didn’t have any authority” in the bank which he called a “start-up bank … with extraordinary poor leadership.”
“Alan Fleming, I think, thought that by being honest with everybody about what happened, he wouldn’t be in this (defendant’s) chair,” Talley said.
He said Fleming admitted everything in a deposition given long before the indictment was returned. He was forced out with a three-month’s severance package.
“I own up to my role, your honor,” Fleming told Wood. “I’m responsible for my actions… and my inactions.”
“I never meant to harm anybody. … I’ve learned my lessons I wish I have learned long ago. I cannot change the past. I wish I could.”
Also Thursday, Wood sentenced Isaac Jefferson “Jeff” Mulling, 53, to 22 months in federal prison and $157,543.60 in restitution for his role in the fraud.
He pleaded guilty Jan. 16 to two bank fraud counts.
Defense attorney Julie Wade said her client, a vice president/loan officer, became “somewhat disgusted with what happened at First National Bank. I think he knew something was wrong.”
“He did not do what he should have done,” she told Wood. “He never spoke up.”
But, Durham told Wood, “The government disagrees. This was not just a going along to get along incident. … He committed a huge fraud.”
“Nobody had any skin in the deal so why in the world would you just not walk away?”
In addressing Wood, Mulling said accepted responsibility.
“I knew what was right and what was wrong,” he said. “I should have stood up and walked away.”
He urged Wood for leniency, “because it will be very difficult to start over again.”
WHAT HAPPENED THIS WEEK
U.S. District Chief Judge Lisa Godby Wood this week sentenced seven former officials in First National Bank for their roles in a massive fraud that resulted in the bank’s collapse. They were:
• Heys Edward McMath III, 59, former president/CEO to three-and-a-half years in prison, a three-year supervised release term and his portion of more than $9.7 million in losses.
• Jay Patrick Gardner, 63, vice president and chief credit officer, to 24 months on probation and restitution of $14,800.
• Jeffrey Allen Farrell, 45, city president of the Richmond Hill branch and a commercial loan officer, to 10 months in federal prison, three years of supervised release and restitution of $57,771.25.
• Stephen Michael Little, 65, former executive vice president/CFO, to 20 months in prison, three years supervised release, a $100,000 fine and $72,571 in restitution.
• Robert Wilson Dailey, 52, senior lending officer, to 38 months in prison, three years supervised release and $158,518 in restitution.
• Alan Robert Fleming, 38, city president of the Tybee Island branch and commercial loan officer, to 38 months in prison, almost $4 million in restitution and three years of supervised release.
• Isaac Jefferson “Jeff” Mulling, 53, vice president-loan officer, to 22 months in prison, $157,543.60 in restitution and three years supervised release.