Former bank CEO pleads guilty to $9M bank fraud - WMC Action News 5 - Memphis, Tennessee

Former bank CEO pleads guilty to $9M bank fraud

(Source: WMC Action News 5) (Source: WMC Action News 5)

A former Tennessee bank CEO pleaded guilty to bank fraud that cost three banks more than $9 million.

According to information presented in federal court, 54-year-old Christopher Brent Jerrolds used his position as President and CEO of Central Bank in Savannah, Tennessee, to give preferential treatment to Tennessee Materials Corporation (TMC) between 2009 and 2012. As a result of the conspiracy, Central Bank, Wayne County Bank, and First Metro Bank lost more than $9 million.

U.S. Attorney Edward Stanton III said between March 31, 2009 and October 18, 2010, Jerrolds allowed TMC to deposit bad checks into their account at Central Bank. These checks, which were insufficiently funded, were used to cover overdraft balances in TMC's account.

The company continued to deposit bad checks with increasing frequency each month.

By October 18, 2010, Jerrolds had accepted and approved 161 bad checks from TMC totaling $116,169,218. The bad checks created false balances in the company's accounts, enabling them to withdraw funds that actually belonged to the bank. TMC was able to take $3.9 million from the bank, without knowledge or approval from Central Bank's Board of Directors.

Additionally, in July 2011, Jerrolds advanced more than $1 million to TMC without knowledge or approval from the Board of Directors, and released $500,000 held as security on a prior loan. However, TMC made no payments on the loan.

In 2011 and 2012, Jerrolds sent Letters of Credit to TMC in the amount of $2 million and $1.7 million respectively. Jerrolds did not record the Letters of Credit. TMC then used the letters of credit to obtain loans from Wayne County Bank and First Metro Bank.

Jerrolds faces up to five years in prison, up to $250,000 in fines, and a period of up to three years of supervised release.  The Court can also order Jerrolds to pay restitution to all three banks.

Jerrolds is scheduled to be sentenced in August 2016.

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