GREELEY, Colo. (AP) _ The Federal Deposit Insurance Corp. fined four people involved in the 2009 collapse of Greeley’s New Frontier Bank $545,000 after a bank failure that cost the FDIC almost $1 billion.
“That’s nothing compared to the amount of dollars that people suffered,” said Don Hijar, owner of Pawnee Buttes Seed Co. in Greeley, whose loans at the bank were sold when the FDIC shut down the bank. “I think of my situation _ it wasn’t pretty,” Hijar said.
New Frontier failed on April 10, 2009, and came crashing down on borrowers, even the ones who were current on their loans. The FDIC sold the loans for pennies on the dollar. In many cases, the new note-holders called in their loans, forcing many borrowers into bankruptcy.
With almost $2 billion in assets, New Frontier was the largest bank in Greeley and northern Colorado.
The four directors of the bank, Larry Seastrom, Bob Brunner, Tim Thissen and John Kammeier, were issued the civil penalties in March and they were announced Friday, after the men were given an opportunity to contest the fines.
Seastrom and Brunner were each fined $175,000. Thissen was ordered to pay $125,000, and Kammeier was fined $70,000.
A representative did not return a request for information on Friday, the Greeley Tribune reported (http://tinyurl.com/mjvykop ).
In 2013, former bank vice president and chief loan officer Gregory Bell was convicted of bank fraud and sentenced to two and a half years in federal prison and ordered to pay restitution.
Inspectors said they found $4 million worth of irregularities from accounting errors and problem credits. In June 2008, the FDIC ordered the bank directors to correct the problem immediately.
The ruling detailed the sales of stock to borrowers who had a combined $173 million in existing outstanding loans with the bank in the summer of 2008. In some cases, the borrowers came to the bank for new loans to finance their activities and were informed they would be approved only if they bought stock in the bank, according to the ruling.
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