Bank files lawsuit against its former president - WMC Action News 5 - Memphis, Tennessee

Bank files lawsuit against its former president

By Jamel Major - bio | email | Twitter | Facebook

OAKLAND, TN (WMC-TV) - The Oakland Deposit Bank filed a federal lawsuit against a former president of the Mid-South bank, accusing him of misappropriating money in a fraudulent loan scheme.

The civil lawsuit filed on August 14, 2009, alleges Stephen D. Henry, former President and Chief Executive Officer of the Bank, misappropriated borrower funds for his own benefit and caused the bank to lose millions.

According to a complaint, the bank claims that "on July 15, 2008, the bank was contacted by a bank customer who expressed concern that a fraudulent loan had been created using his identity and personal information."

Following up on this tip, the bank investigation uncovered where Henry and Stephen L. Sims, a real-estate developer and financial consultant, allegedly stole people's information. According to the bank investigation, beginning in 2003, "Sims contacted potential borrowers and solicited their approval to use their identities, personal information and credit worthiness to obtain loans in their names from the bank."

The complaint also alleges Sims used some of the money from the loans to fund some of his own investments and business ventures.

The bank claims that "in exchange for permitting Sims to use their information or identities to obtain loans, Sims offered borrowers cash payments or a share of profits he expected to gain through his investments and business ventures."

After Sims allegedly provided Henry with borrowers' personal information, enabling Henry to originate loans in their names, the bank claims, "Henry did not ensure information Sims provided him was true and accurate, did not determine whether the borrowers we actually credit-worthy, and did not determine whether the Sims borrowers were aware that loans were being originated in their names."

The bank's attorneys were contacted Tuesday afternoon for comment but did not return the calls, and Stephen Henry's phone number was not in service.

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