Man pleads guilty in bank fraud scheme

NORFOLK, Va. (WAVY) - A local restaurant owner and developer pleaded guilty in court Friday to taking part in the Bank of the Commonwealth fraud scheme.

Thomas Arney, 56, the seventh person to plead guilty in the case, could face up to 20 years in prison when he is sentenced Dec. 3. According to court documents, Arney admitted he helped bank insiders in exchange for preferential loan treatment and helped cover up the bank's losses.

Arney pleaded guilty to charges of conspiracy to commit bank fraud, unlawful monetary transactions and making false statements.

A Grand Jury indictment charging six bank executives in the conspiracy says Arney owned and operated several restaurants, rental properties and a car restoration business and leased commercial office space from the bank. All six men are out on bond.

Read the indictment here.

According to Deanna Warren with the U.S. Attorney's Office for the Eastern District of Virginia, Arney had admitted in court to purchasing a condominium from the bank's CEO, Edward J. Woodard. Reportedly, Woodard and commercial loan officer Stephen Fields fully funded a $433,000 loan for Arney to purchase the condo. In court, Arney said he purchased the condo as a favor to Woodard and as a return for receiving preferential loan treatment at the bank. Arney said Woodard made a more than $50,000 profit when the home was sold and Arney had not made any payments toward the loan.

Bank of the Commonwealth reportedly lost nearly $115 million between 2008 and 201, which could cost the government more than $260 million.