NORFOLK, Va. (WAVY) - A Norfolk businessman was sentenced in a U.S. District Court Wednesday for his part in a scheme with Bank of the Commonwealth executives to commit massive bank fraud.
49-year-old Dwight A. Etheridge, president of Tivest Development & Construction, LLC, was sentenced to more than 4 years in prison, followed by five years of supervised release for conspiracy to commit bank fraud, bank fraud, false statements to a financial institution and aiding and abetting misapplication of bank funds, according to Lisa Fox with the U.S. Attorney's Office for the Eastern District of Virginia.
Etheridge was found guilty of the charges in May after a ten-week trial. Fox said evidence presented in the trial showed that Etheridge and other corporate entities conspired with four former Bank of the Commonwealth executives to mask the bank's loan losses in exchange for preferential treatment.
According to the grand jury, bank officials hid the bank’s true financial condition by overdrawing demand deposit accounts to make loan payments, using funds from related entities without authorization of the borrower to make loan payments, using change in terms agreements to make loans appear current and extending new loans or additional principal on existing loans.
The bank then provided preferential financing to Etheridge and other troubled borrowers in order to buy property owned by the bank. The indictment said those borrowers already had trouble making loan payments.
A press release by the U.S. Attorney's Office for the Eastern District of Virginia further details exactly how the six defendants conspired to commit bank fraud and can be found by clicking here.
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