FDIC Fined Ex-Bank Chairman, Frank Bonan II, $105K –

White Co., Ill. (ECWd) –

We first looked into some aspects of this back in 2018, when we published an article critical of a now-former White Couty Associate Judge, Mark Stanley, who is alleged to have made judicial financial rulings in a civil case favoring his brother-in-law and People’s National Bank (“PNB”) to the tune of more than $7.89 million in an unscheduled and undocketed hearing. He has since retired.

Later, in 2022, we filed a Motion for Leave to Intervene and a Motion to Intervene in the civil case between People’s National Bank and Grand Rivers Community Bank (“GRCB”) because PNB was attempting to file documents under seal (a confidential settlement agreements from a federal civil bankruptcy case), which would have kept the public and media from access to those records in this state court case. The White County Court granted our leave to intervene, granted our motion, and denied PNB’s motion to file documents under seal.

In reaching its November 2023, 141-page final decision to levy a fine and prohibition against Bonan, the FDIC stated:

• Respondent’s testimony was contradictory, inconsistent, self-serving, and generally non-credible.
• Respondent’s claim not to recognize his own handwriting, when he had already stipulated earlier in the action that the document in question had been written by him, is reflective of—in the undersigned’s view—an intent to obscure the facts set before this Tribunal rather than any genuine desire to tell his side of the story in a forthcoming way.
• Enforcement Counsel expert Traci Hefner opined that the civil money penalty amount sought by the FDIC is appropriate due to Respondent’s high positions of authority at both Grand Rivers and PNB and his use of the former to favor the latter.
• The fact that Respondent’s actions similarly benefited a significant borrower at both banks, one of the principals of which Respondent was engaged in a romantic relationship with during the relevant period, at the Bank’s expense is also notable.
• Respondent has breached his fiduciary duties of care and loyalty and engaged in recklessly unsafe or unsound banking practices…
• Respondent acted with willful disregard for the Bank’s safety and soundness “when he ordered Bank employees to file UCC releases relating to Evergreen Drilling . . . to meet U.S. Energy’s demand for the Bank’s UCC terminations to be recorded,” despite knowing that the UCC security interest that U.S. Energy wanted released did not exist and that the only UCC release that was possible would leave the Bank’s $550,000 Evergreen Drilling loan completely unsecured.

Bonan filed a federal action against the FDIC on January 3, 2024, attempting to obtain a Temporary Restraining Order in relation to the FDIC’s findings and fine. The Court DENIED the TRO and dismissed the case.

A Judicial Review hearing is scheduled for January 17, 2024, for arguments against the FDIC’s final ruling and fine.