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Thursday, July 1, 2010

Former Dothan, Alabama bank exec faces federal theft charge

A former Dothan bank executive was recently charged with stealing from his employer of nearly 20 years. Federal court records show James E. Goldsborough, 70, was recently charged with a criminal bill of information of felony theft, embezzlement or misapplication by a bank officer.
Federal court records indicate Goldsborough was employed as the president and later executive vice president in Dothan of PeoplesSouth Bank. The alleged theft happened over an 18-year period from 1991 to 2009 in Houston County.
Records show Goldsborough has been charged with the misapplication of money, funds, credits, securities and other things of value worth in excess of $1,000 from PeoplesSouth Bank.
Assistant U.S. Attorney Joe Schiff said he could not comment on the theft charge against Goldsborough except to say that Goldsborough has a court date on July 19 for an arraignment and a consent plea hearing. Schiff said he could not reveal how much money was stolen, but that more details would be released after the July court hearing.
Dothan attorney Wade H. Baxley, who represents Goldsborough, said his client no longer works at the bank. Baxley said he could not make any other comments about the pending charge against his client.
And though unrelated to Goldsborough’s arrest, another former PeopleSouth Bank employee is also charged with stealing from the bank.
Houston County Sheriff’s deputies arrested Karen Hunter L. Watkins, 42, of Napier Field Road, on Tuesday, on a charge of first-degree theft of property by deception. Specifically, she is charged with stealing $36,509 from the bank.
Houston County Sheriff’s Capt. Antonio Gonzalez said the charges stemmed from her making withdrawals from bank accounts that did not belong to her. He said the business reported the theft to the sheriff’s office last week.
Watkins was taken to the Houston County Jail and held on a $5,000 bond.
James E. Goldsborough, age 70, pled guilty today before United States Magistrate Judge Terry F. Moorer to a one-count felony information charging him with embezzling funds of PeoplesSouth Bank (“PSB”), in violation of Title 18, United States Code, Section 656, U.S. Attorney Leura G. Canary announced.

According to the plea agreement, Goldsborough worked for PSB in Dothan since 1992—first as president and, later, executive vice president. In these positions, Goldsborough had the authority to approve loans up to $25,000.
Goldsborough began embezzling in approximately 1992. He accomplished this by opening a bank account in the name of the fictitious entity. He would then approve loans to fictitious borrowers in amounts of $25,000 or less, deposit the loan proceeds in the account, and use the money either for personal expenses or to repay previously obtained fraudulent loans. Goldsborough would occasionally receive the loan proceeds in cash, falsely representing to the teller that he intended to personally deliver the funds to the borrower. Goldsborough classified the loans as commercial loans because there was no minimum monthly payment—the only requirement was that the loan be paid in full when due. When a loan would become due, Goldsborough would arrange for a new fictitious loan and use those funds to pay the loan that was due. Goldsborough also used his knowledge of PSB's security procedures to avoid certain anti-fraud measures.
At the time Goldsborough's embezzlement scheme was detected in August 2009, PSB's records show that approximately 92 fictitious loans were outstanding with a total principal balance of approximately $1,850,999.23. However, under the plea agreement, Goldsborough reserves the right to argue that the amount is less for purposes of computing his sentence and the amount of restitution.
When he is sentenced this fall by United States District Judge W. Keith Watkins, Goldsborough faces a statutory maximum sentence of 30 years’ imprisonment, a term of supervised release of no more than five years, a fine of up to $1,000,000 (or, if greater, twice the loss to PSB), and an order of restitution. Judge Moorer released Goldsborough on a $25,000 unsecured bond pending sentencing.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Andrew O. Schiff.
A Dothan banker who pleaded guilty to a scheme of creating fictitious loans that spanned almost 20 years was sentenced to 36 months in federal prison on Thursday.




James (Jimmy) Goldsborough was sentenced by U.S. District Judge William Keith Watkins at the federal courthouse in Montgomery. He pleaded guilty to the charge of embezzlement by means of misapplication of funds by a bank officer or employee.



Goldsborough, 71, was arrested in June and accused of creating well more than 100 fake loans as president and then executive vice president of PeopleSouth Bank in Dothan. According to court records, Goldsborough’s scheme was detected in August of 2009. At that time, 92 fictitious loans remained outstanding totaling more than $1.85 million.



Prosecutors contended Goldsborough began the scheme in 1992 by opening a bank account in the name of a false company, Consumer Financial Services. He then created a fictitious owner of the account and would then approve loans to fictitious borrowers in amounts of $25,000 or less, deposit the loan proceeds in the CFS account, and use the money either for personal expenses or to repay previously obtained fraudulent loans. The scheme is said to have gone on for 17 years.



Prosecutors originally sought a sentence of 51 months, but allowed the court to take Goldsborough’s age into account during sentencing.



The maximum penalties for the embezzlement charge was not more than 30 years in prison, a fine of not more than $1 million, or not more than twice the gross gain to the defendant or gross loss to the victim and not more than five years supervised release.

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