Former Hume Bank exec indicted Monday

Jeffrey W. Thompson, 39, of Hume, Mo., was charged in a 13-count indictment for bank fraud by a federal grand jury in Kansas City Monday. Thompson is charged with one count of bank fraud, three counts of misapplication of bank funds, six counts of false bank entries, reports and transactions, and three counts of making false statements to the FDIC. Thompson was the president of Hume Bank from 2001 until 2007.

Thompson is charged with engaging in a scheme to defraud Hume Bank from January 2004 through August 2007, when he left the bank. According to the indictment Thompson presented false statements and reports to the bank's board of directors and the FDIC. These false reports concealed problem loans from state and federal bank examiners and from the bank's board.

As a result of Thompson's alleged misconduct the bank incurred large loan losses including $234,000 on a loan to his wife's uncle as well as loans to other relatives. On March 7, 2008, the FDIC closed the bank and the FDIC insurance fund sustained a loss of $4,324,463 in order to meet obligations to depositors. The bank was taken over by the Security Bank of Rich Hill, March 10, 2008.

According to D. Eric McClure, Commissioner of Finance for the State of Missouri, Security Bank assumed all deposit liabilities and Hume Bank became a branch of Security Bank on that date.

"All of the services that Security Bank of Rich Hill is authorized to provide at its locations in Rich Hill, Seligman, Washburn and Rockville may also be available at the branch in Hume," McClure said.

Today's indictment also alleges that Thompson completed false Officer's Questionnaires to the FDIC by falsely stating that the bank had no accommodation loans, or nominee loans, and by falsely stating that the bank had no instances of capitalized interest. In fact, Thompson had made accommodation, or nominee loans, to relatives from which he personally profited, and had made loans which capitalized interest.

Thompson allegedly made a false entry in the books in regard to six loans to Brad Laning, his wife's cousin, by changing the past due principal to zero on 16 occasions, when in fact, all six loans had past-due principal. In another instance, Thompson allegedly made a false entry in the books in regard to a loan to Rick Laning, his wife's uncle, by stating that past due interest was zero and past due principal was zero, when in fact the past due interest was $3,672 and the past due principal was $55,510. Thompson also allegedly made a false entry in the books in regard to a loan to Kay Thompson, his mother, by stating that the past due interest was zero and the past due principal was zero, when in fact the past due interest was $246 and the past due principal was $3,500.

According to the indictment, Thompson concealed loans and overdrafts from the bank's board of directors. Thompson concealed from the board loans he made to cover unposted overdrafts, and concealed from the board loans he made to capitalize interest. As part of the fraud scheme, the indictment alleges, Thompson significantly lowered interest rates on loans without board approval or written loan modification agreements in the bank files. Thompson allegedly instructed customers to sign blank inspections, financial statements, and deeds of trust, and told the customers that he would complete the forms later.

Thompson allegedly misrepresented to the board the loan purpose on problem borrowers. For example, Thompson made a loan in the amount of $14,500 to Davie Klinksick, his father-in-law, listing the purpose of the loan as "farm equipment." Thompson instead deposited $9,000 of the proceeds from that loan into a joint account held by him and his wife, the indictment alleges, and on the same day wrote a check from that account in the amount of $9,000 to Fugate Motors RVs.