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Federal Criminal Defense Blog Federal Criminal Defense and Civil Litigation in Georgia and Beyond

Developer, Bank Executives Indicted Over $80 Million in Loans/Failure of Integrity Bank

Posted in Fraud, Noteworthy Cases

Last week, an indictment was unsealed in the U.S. District Court for the Northern District of Georgia, charging Guy Mitchell of Coral Gables, Florida, and Douglas Ballard and Joseph Todd Foster, of Atlanta, with bribery, insider trading and securities fraud, as reported in the Atlanta Journal Constitution.

Mitchell was a hotel developer and Ballard was a vice president with Integrity Bank in Alpharetta, Georgia. Beginning in 2004, Mitchell allegedly took out tens of millions in loans from Integrity for alleged real estate ventures, including $29 million to purchase Casa Madrona, a 63 room resort hotel overlooking San Francisco Bay, and for the purchase of an island in the Bahamas. Ballard allegedly authorized the loans and draw downs, in exchange for accepting more than $230,000 in kickbacks from Mitchell.

The indictment alleges that Mitchell misled Integrity’s Board of Directors regarding the amount of work which had been done on the hotel. Integrity’s Board claims that it never approved many of the loans.

Foster, vice president of risk management for Integrity, allegedly sold 30,000 shares for $350,000 after discovering that Integrity did not have enough liquid security to cover a $20 million loan to Mitchell.

Integrity, a faith-based bank, sustained an alleged $80 million in losses and constitutes the fourth largest of Georgia’s many bank failures. The bank was shut down by the Federal Deposit Insurance Corporation in August of 2008.

The defendants have pled not guilty. Mitchell was released on a $2.5 million bond and Ballard was released on a $200,000 bond.