ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, June 7, 1996 TAG: 9606070061
SECTION: VIRGINIA PAGE: C-4 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
Two men implicated in the collapse of Roanoke's First Security Bank have agreed to plead guilty to federal charges.
William C. Roberts of Rocky Mount and Carson W. Carter of Roanoke will plead guilty to bank fraud for running a check kiting scheme that contributed to First Security's failure in 1991, according to the U.S. Attorney's Office. They are accused of defrauding two banks of $1.9 million.
Roberts, who owned an amusement park in Huntington, W.Va., and Carter, who owned a Roanoke real estate investment company, used 16 checking accounts to float checks between First Security Bank and the Bank of Buchanan (now Bank of Botetourt), prosecutors said.
The accounts were in Roberts' name. He and Carter wrote checks daily on accounts that did not have sufficient funds to cover them, and checks written on other accounts were deposited to make it appear there was a sufficient balance, according to prosecutors.
The Bank of Buchanan discovered the problem during a year-end audit, on Dec. 31, 1990, and reported it to First Security after New Year's.
The $500,000 his bank lost in the scheme prompted First Security President Gary Peck to resign in January of that year. The Bank of Buchanan lost $1.4 million.
First Security Bank was shut down by regulators in May 1991. The bank, founded in 1988, was also connected to a "straw man" loan scheme run by the late Richard Hess, a Salem mortgage broker.
Peck pleaded guilty to money laundering last year in connection with a loan he made to Roberts and was sentenced to 13 months. He admitted arranging a $40,000 loan for Roberts, who owed him money, in August 1989.
Peck took almost $15,000 of the loan for himself, according to testimony by FBI Special Agent Ron Buckley at Peck's hearing last year. It is illegal for a banker to make a loan in which he gets part of the proceeds.
According to the FBI, the kickback stemmed from a secret agreement Peck had with Roberts that ensured Peck monthly payments if he promised never to exercise his option to buy into a business Roberts had started with his uncle. As long as he didn't exercise his option, Roberts would be assured a controlling interest.
Carter owned a real estate investment company on Williamson Road. He filed for bankruptcy in 1993.
After Peck's plea agreement was signed, the FBI discovered another loan that Peck made to Roberts when Peck was a vice president at Signet Bank. Peck made a $35,000 loan to Roberts and kept $3,000 of it. He was not charged because his plea agreement ensured that he would be charged only with the one felony.
The Federal Deposit Insurance Corp. took over as receiver for First Security Bank and ended up suffering a multimillion-dollar loss.
Another bank officer, Thomas E. Hartman, pleaded guilty to accepting bribes in 1992.
Roberts and Carter have entered into plea agreements with the U.S. Attorney's Office, but no date has been set for them to plead guilty.
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