Judge orders Jerry Williams to pay $31 million to FDIC

The ex-CEO of Naples-based Orion Bank has been ordered to pay more than $31 million to the Federal Deposit Insurance Corp. for his leading role in a bank fraud conspiracy.

At a restitution hearing in Orlando on Wednesday, U.S. District Judge Charlene Honeywell decided on the amount Jerry Williams should pay the FDIC, which became the receiver for the local bank when it failed. The amount is $31,048,165, which is based on the losses the agency suffered when it took over the bank's fraudulent loans after selling most of Orion's assets to IberiaBank.

Williams and his co-conspirators made the loans as part of a scheme to trick regulators and make the bank appear in better financial shape than it was as it teetered on the edge of collapse.

Williams' attorneys argued the FDIC's losses were much less, but the judge sided with the prosecution, which fought for the higher amount.

"My reaction is I know that his attorneys tried diligently to reduce that amount. Even though the employees, including myself, won't be the benefactors, I'm happy that the federal government succeeded in their attempts to get that money," said Bill Bartels, Orion's former human resources director.

Former bank employees who bought Orion stock as part a company retirement plan will not get a share of any of the restitution Honeywell has ordered Williams to pay. Bartels worked for the bank for 12 years and estimates he lost a nest egg once valued at more than $700,000.

When the FDIC stepped into the shoes of the bank, it became the victim.

Williams, 51, is serving a six-year sentence at a minimum security prison camp in Montgomery, Ala., after pleading guilty to his involvement in the scheme.

"It will certainly be a different lifestyle than he lived in Naples," Bartels said.

At his sentencing in June, Williams agreed to pay more than $5.7 million to Orion shareholders he sold stock to months before the bank failed in November 2009. But that restitution left out hundreds of other investors, who lost millions. Many of them were bank employees.

"I'm disappointed as an employee and I'm disappointed for my colleagues," Bartels said. "I think we all believe that at the end of day justice was served and it's unfortunate that many of us lost our life savings."

Former employees brought a federal class-action lawsuit against Orion Bancorp Inc., the bank's holding company, in hopes of recovering some of their lost money. But a judge has yet to decide whether the lawsuit can move forward. That decision may now finally come with the federal case coming to a close, but how much Williams will actually be able to pay anyone is a big question mark, especially now that he's in prison, Bartels said.

"Frankly, I don't know if there is a lot out there to be had," he said. "I don't know if there is any money for any of us."

Connect with Laura Layden at www.naplesnews.com/staff/laura–layden

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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