ALPHARETTA, Ga. – Douglas Ballard, Guy Mitchell and Joseph Todd Foster were sentenced Nov. 6 for their roles in a conspiracy to commit bribery and bank fraud, insider trading and tax evasion that occurred at the now-failed Integrity Bank, which was headquartered in Alpharetta and closed in 2008.
Ballard, 44, of Alpharetta, a former executive vice president at the bank, received more than $200,000 in cash bribes from Mitchell, 54, of Miami, Fla., the bank’s largest borrower. At the same time in 2006, when Ballard was being bribed, he allowed Mitchell to draw more than $7 million from a loan that was supposed to be used for renovation and construction at a hotel in California, despite the fact that no renovation or construction work was done. Instead, Mitchell used the money to buy an island in the Bahamas, travel by private jet, purchase basketball tickets, buy jewelry and expensive cars and a mansion in Florida.
Mitchell received $20 million in additional business loans from Integrity Bank after the hotel loan proceeds were exhausted, and he continued to use some of that money for impermissible, personal expenses. Mitchell defaulted on the loans and Integrity Bank eventually failed.
Foster, 46, of Blakely, Ga., was Integrity Bank’s vice president in charge of risk management. He sold nearly all of his Integrity stock in August 2006 based on materially adverse information about the company that was not available to the public. Specifically, Foster knew that the bank was in an increasingly precarious position because of Mitchell’s financial difficulties and pending default.
Ballard was sentenced to two years and six months in federal prison, to be followed by three years of supervised release. He pled guilty to conspiracy to commit bank fraud and bribery and income tax evasion.
Mitchell was sentenced to five years in prison, to be followed by three years of supervised release. He pled guilty to conspiring to commit bank fraud and bribery.
Foster was sentenced to three years of probation and 120 hours of community service. He pled guilty to securities fraud.