May 24 The former chief executive of a failed
U.S. bank in Norfolk, Virginia, and three others were convicted
Friday of conspiracy to commit bank fraud and other charges in
connection with a scheme to conceal loan losses that contributed
to the bank's collapse in 2011.
Edward Woodard, the former chief executive of Bank of the
Commonwealth, was found guilty along with two other executives
by a federal jury in Norfolk following a multi-week trial, the
U.S. Justice Department said.
Federal prosecutors are pursuing several cases stemming from
the U.S. financial crisis, which battered large and small banks
Bank of the Commonwealth, which at one time had $1.3 billion
in assets, cost the Federal Deposit Insurance Corp an estimated
$268 million when it failed, prosecutors said. The bank's assets
were acquired by Southern Bank and Trust Co at the time of the
Prosecutors secured the indictment against Bank of the
Commonwealth's former executives in July 2012.
Neil MacBride, the U.S. Attorney for the Eastern District of
Virginia, said in a statement that the verdict "sends a clear
message to top executives and insiders in the financial services
"The brazen greed and dishonesty of these four defendants
toppled one of Virginia's largest financial institutions and
intensified the impact of the 2008 financial crisis on the
public during the height of the fiscal storm," MacBride said.
According to prosecutors, Bank of the Commonwealth began an
aggressive expansion in 2006 beyond its historical focus of
Norfolk and Virginia Beach.
Many of its loans were funded without regard to industry
standards, prosecutors said. By 2008, losses mounted as loans
From 2008 to 2011, Woodard and Stephen Fields, a former
executive vice president and commercial loan officer at the
bank, hid the bank's financial condition, authorities said. Bank
insiders also gave preferential financing to troubled borrowers
to buy properties Bank of the Commonwealth owned, prosecutors
Woodard, 70, was convicted of charges, including conspiracy
to commit bank fraud, bank fraud and false entry in a bank
Other defendants convicted on conspiracy to commit bank
fraud and other charges included Fields, Troy Brandon Woodard,
Woodard's son and an employee of a mortgage loan specialist at a
bank subsidiary, and Dwight Etheridge, a bank customer.
Simon Hounslow, an executive vice president and chief lending
officer until the bank's closing, was acquitted of all charges,
the Justice Department said.
"We have long believed he never should have been charged in
this case and, after careful deliberation, it is clear the jury
came to that view," John Adams, a lawyer for Hounslow at
McGuireWoods, said in an email.
Lawyers for the others defendants did not immediately
respond to requests for comment.
A separate lawsuit filed in January by the U.S. Securities
and Exchange commission against Woodward, Fields and another
executive remains pending.
The case is U.S. v. Woodard, et al, U.S. District Court,
Eastern District of Virginia, No. 12-cr-00105.