Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, May 9, 1995 TAG: 9505090104
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
DATELINE: LENGTH: Medium
In a plea agreement, Gary A. Peck, 45, admitted receiving almost $15,000 in a kickback from a $40,000 loan made to a bank customer in 1989. He then converted the money into a cashier's check that he used to pay off two outstanding loans he had at Sovran Bank, according to the U.S. attorney's office.
Peck has paid back the $14,966.80, but he faces a fine and a prison term. He still must appear in court to enter his plea.
The transaction to which Peck admitted guilt took place in August 1989, a month after he became president of the bank. He resigned in January 1991, citing health reasons, and the bank was closed by state banking officials four months later.
As part of his plea agreement, which Peck signed last June and was made public Monday, Peck acknowledges that he "abused a position of public or private trust."
Federal officials continue to investigate the collapse of First Security, as well as other bank fraud in the Roanoke Valley. Assistant U.S. Attorney Jennie Waering said more charges are likely.
First Security Bank had a short but troubled life.
The Williamson Road bank opened in 1988 and was shut down by the state in May 1991, near insolvency and without enough capital for safe and sound operation. The Federal Deposit Insurance Corp. took over as receiver and ended up suffering a multimillion dollar loss.
Another bank officer, Thomas E. Hartman, pleaded guilty to accepting bribes in 1992. Hartman made "straw man" loans for Salem developer Richard Hess in a scheme that came to light in 1990. Four other banks also were linked to Hess' plan to get credit-worthy borrowers to take out loans through obliging bankers, with the borrower getting a cut and Hess promising to repay the loan.
Peck had an 11-year history in banking before taking over the First Security presidency.
by CNB