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Thursday, Jul 12, 2012 2:45 PM UTC

Former bank CEO, vice presidents indicted in Va.

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Topics: From the Wires,

NORFOLK, Va. (AP) — The former chief executive of the Bank of the Commonwealth and three former vice presidents have been indicted by a federal grand jury on charges that they conspired to commit bank fraud.

The Bank of the Commonwealth was headquartered in Norfolk, serving Hampton Roads and northeastern North Carolina until it failed in 2011. The indictment unsealed Thursday says top executives masked non-performing assets at the bank for their own personal benefit and to the detriment of the bank. Among other things, the indictment says they conspired to conceal the bank’s true condition by funneling bank-owned property to troubled borrowers and overdrawing demand deposit accounts to make loan payments.

The indictment says the bank’s failure will cost the federal government through an insurance fund more than $260 million.

Edward J. Woodward served as the bank’s CEO and chairman of its board of directors for more than 30 years until he was forced to step down as chairman in April 2010 and then ultimately forced to retire in December 2010. Simon Hounslow was the bank’s executive vice president and chief lending officer. The indictment says he was responsible for operating the bank in a safe manner and keeping the board of directors informed about the bank’s financial condition.

Among other things, the indictment says Woodward, Hounslow and Stephen G. Fields, a former executive vice president and commercial loan officer, removed millions of dollars in loans from a past-due report before it was presented to the bank’s board of directors. Also facing charges is Woodward’s son, Troy Brandon Woodward, who was a vice president and mortgage loan specialist until January 2011.

Two people who were labeled as troubled borrowers were also indicted.

If convicted, the maximum sentence is 30 years in prison.

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Online: Brock Vergakis can be reached at www.twitter.com/BrockVergakis

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