A former bank president at failed Oklahoma bank First State Bank of Altus is facing life in prison for his role in a massive fraud case. Paul Doughty was president and chairman of Altus, and has been convicted of 10 charges including bank fraud, conspiracy to commit bank fraud, misapplication of bank funds, making a false bank entry and unauthorized issuance of a bank loan.
We come across stories of rotten real estate agents, lawyers, and property investors all the time, but one involving the President and Chairman of a bank is a first at Really Rotten Realty.
Doughty and an associate were charged with originating false Federal Savings Bank loans to finance a Colorado real estate development. He issued 14 lot loans totalling over $10 million, and a handful were issued over Doughty’s authority limit and included a loan of over a half million dollars to his associate’s personal company.
Doughty and his associate presented loans as “no money down” investment opportunities, and invested in a company before it purchased real estate in the development. There were a handful of fishy actions, which added up to a big heap of fraud.
Proceeds from the sales were funneled into a company controlled by Doughty and his partner, and each were paid “officer bonuses” in excess of $100,000 for their role.
The business partner, Fred Anderson, accepted a plea deal in exchange for testimony against Doughty. Even for savvy real estate investors, the duo could have easily pulled this off due to their banking connections and position.
One thing you can bank on is Doughty not bothering anyone again, as the government shut the bank down due to losses related to the scheme. Read the whole story at HousingWire.