Former Savannah bank CEO pleads guilty to $9 million bank fraud
SAVANNAH, Tenn. — A former Savannah bank CEO has pleaded guilty to one count information charging him with conspiracy to commit bank fraud.
According to the information presented in court, Christopher Brent Jerrolds, 54, of Savannah was Central Bank’s CEO and president until his termination from the bank in 2012, according to a release from the U.S. Attorney’s Office.
According to the information, beginning in 2009 and continuing until March 2012, Jerrolds, acting in his capacity as President and CEO of Central Bank, gave preferential treatment to Tennessee Materials Corporation.
As a result of the criminal conspiracy, Central Bank, Wayne County Bank, and First Metro Bank lost more than $9,000,000, according to the release.
Jerrolds became the president and CEO of Central Bank in 1996 and a member of the Bank’s Board of Directors in 1998.
The information states that from March 31, 2009, until October 18, 2010, Jerrolds allowed TMC to deposit bad checks into TMC’s account at Central Bank. The checks were deposited into TMC’s account to cover overdraft balances.
When a previously deposited bad check in TMC’s account was returned for insufficient funds, another bad check drawn on one of TMC’s other bank accounts was deposited to replace the previously deposited bad checks,” according to the release.
The deposited amounts and the frequency of deposits increased each month, and at times multiple checks were deposited on a single occasion.
By October 18, 2010, Jerrolds was responsible for accepting and approving TMC’s deposit of 161 bad checks with a total transaction amount of $116,169,218, according to the release.
The deposit of the bad checks created “false balances” in TMC’s account, which enabled TMC to use funds in their checking account that belonged to Central Bank.
The fraudulent account balances created by the deposit of the bad checks enabled TMC to take approximately $3.9 million belonging to Central Bank without the knowledge or approval of the Central Bank’s Board of Directors, the release states.
On July 11, 2011, Jerrolds made a $1,079,338 advance to TMC without the knowledge and approval of the Bank’s Board of Directors, according to the release. During the same time, Jerrolds released to TMC $500,000 that Central Bank held as security on a prior loan to TMC.
Jerrolds released the monies to TMC despite the fact that TMC made no payments on the loan and without the approval of the Bank’s Board of Directors.
In 2011 and 2012, Jerrolds reportedly issued letters of credit to TMC in the amount of $2 million and $1,783,000. Jerrolds concealed the issuance of the letters of credit from Central Bank, did not enter them into the books and records of Central Bank and did not obtain approval from the Bank’s Board of Directors to issue the letters of credit, according to the release.
The borrower used the letters of credit as collateral to obtain a $2 million loan from Wayne County Bank and a $1,783,000 loan from First Metro Bank. Wayne County Bank and First Metro Bank made a demand on the letters of credit after the borrower defaulted on the loans, the release states.
Jerrolds faces a sentence of up to five years imprisonment, a fine of not more than $250,000 and a period of up to three years of supervised release. The court can also order Jerrolds to pay restitution to Central Bank, Wayne County Bank and First Metro Bank.
Jerrolds is scheduled to be sentenced Aug. 11 by Judge Breen in Jackson.
The case was investigated by the Federal Deposit Insurance Corporation and the Federal Bureau of Investigation. The government’s case is being prosecuted by First Assistant Larry Laurenzi.
