Borrower Guy Mitchell has pleaded guilty to a charge of conspiring to commit bank fraud and to pay bribes to an LO as part of a scheme that contributed to a bank’s failure, according to the Federal Bureau of Investigation.
“Mitchell used millions of improperly obtained loan proceeds to fund a lavish lifestyle,” said U.S. attorney Sally Quillian Yates in a press release. “His actions corrupted the lending process and jeopardized the safety and soundness of Integrity Bank, which failed and was taken over by the FDIC.”
Mitchell borrowed more than $40 million from the now-failed Integrity Bank in 2005 and 2006, according to Yates, the charges, and other information presented in court.
“One of these loans was to acquire and renovate the Casa Madrona Hotel, a luxury property overlooking the water in Sausalito, Calif. During that time, Mitchell was bribing Douglas Ballard, a former loan officer at Integrity, with hundreds of thousands of dollars,” according to the FBI report.
“Although Mitchell did use some of the money he received from Integrity for hotel purposes, he never performed any renovations. Instead, he used loan draws to buy a private island in the Bahamas, to travel by private jet, and to pay for Miami Heat tickets, fancy jewelry, expensive cars and a mansion in Coconut Grove.”
According to the FBI, Mitchell was the bank’s largest borrower and eventually defaulted on his loans, contributing to the bank’s failure. Ballard previously pleaded guilty to conspiracy and tax evasion.
The legal action against Mitchell is part of efforts underway by
