(Updates with excerpt from complaint in third paragraph.)
Jan. 30 (Bloomberg) -- The Federal Deposit Insurance Corp. sued former officials of County Bank in Merced, California, part of Capital Corp. of the West, claiming their mismanagement caused $42 million in losses through bad loans.
Named in the suit, filed Jan. 27 in federal court in Fresno, were former County Bank Chief Executive Officer Thomas T. Hawker; John J. Incandela, Dave Kraechan, and Edwin Jay Lee, who are former vice presidents; and Edward Rocha, the former chief operating officer and bank president.
“Defendants caused or allowed County to make imprudent real estate loans,” the FDIC said in the complaint.
The bank, which was established in 1977 and provided residential construction loans in California’s central valley, failed in 2009, according to the complaint. The FDIC is receiver for the bank.
“Management repeatedly disregarded the bank’s credit policies and approved loans to borrowers who were not credit worthy” or lacked sufficient collateral, the FDIC alleged.
The former officers either had no phone number listed or had an unlisted number, and couldn’t immediately be located for comment on the lawsuit.
The case is FDIC v. Hawker, 12-CV-00127, U.S. District Court, Eastern District of California (Fresno).
--Editors: Andrew Dunn, Stephen Farr
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