Tuesday morning at the Federal Courthouse in Panama City opening statements kicked off in the trial against three former Panhandle bankers. The men are accused of defrauding the United States Government and defaulting on a 3.8 million dollar federal loan and this case will all boil down to down to intent.
The prosecution says the men intentionally lied on paperwork for the loan. The defense says they will present character evidence to prove their defendants innocent on all charges. Coastal Community Bank or CCB closed its doors in 2010 as a victim to the bank crisis. After the closure bank CEO, Terry Dubose, bank attorney, Frank Baker and bank CFO, Elwood Woody West, were indicted on fraud charges. CCB owed another bank 3 million dollars. To repay debt the bank took advantage of a FDIC government backed loan program, Temporary Liquidity Guarantee Program or TLGP. The program created during the 2008 bank collapse was only a few months old. The prosecution says the men on trial knew the program was for unsecured debt only. The defense says since the program was new, they were confused and made a mistake.
An unsecured loan means there is no collateral. The loan CCB owed to the other bank although was a secure loan marked as unsecured. The government says the men deliberately lied while the defense claims making a mistake is not breaking the law. The trial is expected to last two weeks or possibly longer.