Former Coast Bank of Bradenton exec gets 18 months as another area scamster bites the dust
Wake up and good morning. Phil Coon (left), the former lending executive of Bradenton's Coast Bank who used borrowers’ construction loans in a fraud scheme that generated more than $1.5 million, will serve 18 months in federal prison. So says U.S. District Judge Elizabeth A. Kovachevich, who agreed to a sentence on the lower end of guidelines on Coon's guilty plea to one count of conspiracy to commit wire fraud and money laundering.
Why do we care about about this relatively petty event given the volume and magnitude of banking, mortgage, real estate and Wall Street fraud flooding this country in the past decade? Well, crime is a lot like real estate: Location, location, location. And Coon and the now long gone Coast Bank were in cahoots with St. Petersburg homebuilder Construction Compliance Inc. That firm became insolvent, leaving borrowers on the hook for loans of up to $90,000. Throughout the loan program’s two-year history, Coon and former mortgage broker John Miller (who will be sentenced later this month) conspired to add an extra point to the loans’ closing costs, generating the money that Coon pocketed and used to purchase gifts for his wife and friends and donate to a church.
Coast Bank began to fail in 2007 and was purchased by First Bank out of St. Louis (perhaps not its best acquisition), which then pursued most of the borrowers for the loans they had taken out while Coon was Coast’s executive vice president.
Read more details about Coon's sentence in these Bradenton Herald and Sarasota Herald Tribune stories. But if you want the sordid details of the scam that dragged Coast Bank down in the first place, check out this fine piece of reporting from 2007 by former St. Petersburg Times writer James Thorner.
It details how the Florida housing boom was creating instant millionaires when St. Petersburg builder Jesse Battle III (who ran Construction Compliance Inc. or CCI) hit on a promising formula to feed the public's hunger for no-pain, all-gain real estate deals (remember those days?). His partner in the deal, Coast Bank of Bradenton, financed at least 482 of the CCI loans was soon on the hook for upwards of $77-million customers may never repay. Stockholder wrath sent bank shares spiraling to record lows, leading ultimately to its takeover by First Bank.
In court Wednesday on his 58th birthday, Coon made his first comments in years, breaking down in tears as he promised the judge that he "will be the best person I can possibly be."
Funny how so many folks want to be exemplary citizens on sentencing day.
-- Robert Trigaux, Business Columnist, St. Petersburg Times