GulfSouth Bank Execs Cook the Books, Face Decades in Prison

PENSACOLA, FLORIDA – A web of deceit and fraudulent loans unraveled at GulfSouth Private Bank, culminating in convictions and guilty pleas for three men involved in a multi-million dollar scheme. Anthony J. Atkins, 51, of Eufaula, Alabama, was found guilty Friday, March 10, after a five-day trial on charges of conspiracy to commit bank fraud, four counts of false statements to a federally insured financial institution, bank fraud, and mail fraud affecting a financial institution. He now faces a potential 30 years behind bars for each count.

The scheme dates back to 2007, when a company with a $3.4 million loan from GulfSouth Private Bank signaled it couldn’t meet its mortgage payments on three condominiums. Rather than reporting the looming loss, bank president Anthony Atkins allegedly concocted a plan to hide the debt. He enlisted the help of co-conspirators, including Bruce A. Houle, 57, of Inlet Beach, Florida, who pled guilty to conspiracy to commit bank fraud and one count of false statement to a federally insured financial institution, and Samuel D. Cobb, 37, of Destin, Florida, who pled guilty February 27, 2017, to conspiracy, four counts of false statement to a financial institution, and bank fraud.

The trio allegedly targeted four individuals – Houle, Mark W. Shoemaker, Michael Bradley Bowen, and William Blake Cody – convincing them to take out new loans to purchase the same condominiums already in financial trouble. The hook? Atkins and Cobb falsely assured them the loans were “non-recourse,” meaning the men wouldn’t be held liable if they defaulted. Approximately $3.8 million in new mortgages and lines of credit were issued, cleverly masking the original bad debt and giving the illusion that GulfSouth’s finances were healthy. Fraudulent security agreements were fabricated to support this charade.

The deception didn’t stop there. In September 2009, GulfSouth received $7,500,000 in Troubled Asset Relief Program (TARP) funds from the U.S. Treasury. Despite this federal bailout, Atkins and Cobb allowed the collateralized condominiums to be sold in “short sales,” ultimately resulting in a loss for the bank. They then allegedly authorized the write-off of the deficiencies and lines of credit, further concealing the extent of the fraud. This entire operation was designed to avoid reporting the true financial state of the bank.

U.S. Attorney for the Northern District of Florida, Christopher P. Canova, announced the verdict and pleas, stating, “This bank fraud case is a reminder that my office will vigorously prosecute those who do not conduct ethical transactions, especially financial representatives who abuse their positions of trust.” The case was a joint effort by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), with Assistant United States Attorney Tiffany H. Eggers leading the prosecution. The defendants face a maximum of 30 years in prison per count.

Sentencing Schedule: Atkins is scheduled to appear before the court on May 31, 2017, at 10:30 a.m. Houle’s sentencing is also set for May 31, but at 2:00 p.m. Cobb will be sentenced on May 16 at 10:30 a.m. All hearings will take place at the United States Courthouse in Pensacola, Florida. Grimy Times will continue to follow this case and report on the final sentencing outcomes.