Fed suit alleges negligence in Cornelia bank failure

GAINESVILLE - Two former bank officials with the Community Bank & Trust of Cornelia are listed as defendants in a lawsuit filed in U.S. District Court in Gainesville.

Former CBT president and CEO Charles Miller and retail banking group vice president Trent Fricks are defendants in the suit filed by the FDIC, the Federal Deposit Insurance Corporation.

The FDIC alleges that Miller and Frick's negligence resulted in an $11-million loss by ignoring bank policy in issuing Home Funding Loan Program loans. The FDIC wants to recover the money on behalf of the bank's depositors and creditors.

CBT closed in January 2010. According to the complaint, Fricks breached his fiduciary duties and was negligent in approving HFLP loans, violating bank policy. Miller's alleged negligence stems from his failure to supervise Fricks and implement corrective measures.

The complaint further states that Fricks was directly responsible and personally approved HFLP loans despite underwriting deficiencies and violations of the bank's loan policy.

Fricks allegedly approved the loans without obtaining signed or complete financial statements, without appraisals prepared for the bank and in excess of the bank's loan ratio limit. Fricks also approved HFLP loans with collateral outside the bank's lending territory.