Jerry Williams, a once high-powered banker in Naples, faces a lawsuit for defaulting on more than $6 million in loans taken out for “business investments.”
The ex-CEO of Orion Bank has been sued in Collier County Circuit Court by Florida Community Bank, headquartered in Immokalee.
According to the lawsuit, Williams, who was ousted from Orion in November days before regulators shut it down, was approved for two lines of credit by Florida Community Bank. One was for $5,925,000. The other was for $500,000.
Williams has failed to pay off the loans and owes more than $220,000 in interest, according to the lawsuit. The bank is seeking damages on top of the money it’s owed, including attorneys’ fees. The suit was filed Dec. 28.
The loan for $5,925,000 matured on Oct. 30, according to the lawsuit. Williams put up stock as security for the loans: 370,340 shares in First Bank Corp. Inc. and 125,528 shares in Orion Bancorp Inc., the parent of Orion Bank.
Now that Orion has been shut down, it’s unclear what if any value the bank’s shares may hold.
The $500,000 loan, renewed several times, has now come due because Williams did not make the quarterly payments, according to the lawsuit.
Stephen Price, CEO of Florida Community Bank, and the bank’s attorney on the case could not immediately be reached for comment.
Regulators shut down Orion on Nov. 13 as losses continued to mount. The bank lost $75 million in the third quarter of last year. It was hammered by bad loans. Orion had more than $250 million in construction and commercial loans that were classified as non-performing, which means borrowers weren’t keeping up with payments.
Williams was accused of lying to regulators and making the bank appear in better shape than it was. No criminal charges were brought.
The failure of Orion has raised many questions. There don’t seem to be many answers. Borrowers have been caught up in the mess. So have investors.
Williams has been quiet. Phone calls to his home over the past few months have gone unanswered.
IberiaBank, a publicly traded bank based in Louisiana, took over Orion’s deposits and branches, but not its private shares.
In the case of Orion, shareholders stand to lose millions if they can’t get their investment back. There were 300 or more investors.
Williams had been Orion’s largest shareholder. It’s not clear if he sold off any of his shares before he was ousted from the bank.
Regulators allege that Williams made $60 million in illegal loans to “straw buyers” who were fronting for a borrower who already had reached his allowable loan limit. They say Williams knew $15 million from those loans would be used to buy stock in Orion Bancorp, and that he lied about it to regulators.
According to regulators, the questionable loans also enabled the borrowers to buy “certain low-quality assets” from Orion.
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Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.