Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 9, 1995 TAG: 9506090078
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
DATELINE: LENGTH: Medium
Peck admitted arranging a $40,000 loan for a businessman who owed him money in August 1989, a month after he became president of the local bank. Peck converted almost $15,000 of the money into a cashier's check that he used to pay off two outstanding loans he had at Sovran Bank, according to FBI Special Agent Ron Buckley.
Peck has paid back the $14,966.80, but he faces a fine and a prison sentence of 24 to 30 months.
The kickback stemmed from an agreement Peck had with William Roberts and his uncle, who bought a company with help from Peck, Barry Flora and Frank Selbe. The three men lent the Robertses money for the down payment for the company, and each were promised an option to buy 20 percent of the business, according to Buckley. The name of the company was not revealed in court, and the prosecutor would not provide it.
When the business was doing well in late 1983, William Roberts struck a secret deal with Peck: if Peck promised never to exercise his option, Roberts would pay him $200,000 over 10 years. The deal ensured that the Robertses would retain majority ownership of the company even if Flora and Selbe bought in. Selbe, a former Roanoke attorney, pleaded guilty to income tax evasion in 1991.
Roberts' business soon was in trouble, and he fell behind in his payments to Peck. Peck had to "hound them to get his monthly payments."
A month after becoming president of First Security Bank, Peck arranged a loan for Roberts and took the $15,000 out of it to pay off two loans Peck had at Sovran Bank. It's illegal for a banker to make a loan in which he gets part of the proceeds; the bank was told the loan was for construction expenses.
First Security Bank was shut down by regulators in May 1991, four months after Peck resigned as president.
Federal officials continue to investigate First Security's collapse. Assistant U.S. Attorney Jennie Waering said more charges are likely this summer.
Peck signed a plea agreement admitting the one money laundering charge last June, but was not formally charged until a month ago. The time lapse indicates that Peck was given an opportunity to cooperate with federal investigators.
After the plea agreement was signed, the FBI discovered another loan that Peck made to Roberts when Peck was a vice president at Signet Bank. Peck made a $35,000 loan to Roberts and kept $3,000 of it.
Peck was not charged as a result of that loan because "the understanding was if he pleads to a felony, that's all we'll go after him for," Waering said.
The Federal Deposit Insurance Corp. took over as receiver for First Security Bank and ended up suffering a multimillion-dollar loss.
Another bank officer, Thomas E. Hartman, pleaded guilty to accepting bribes in 1992.
by CNB