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Ex-chief of bank pleads innocent

The former chairman of Sun Belt Federal Bank has pleaded innocent to charges that he cooked the books to hide violations of an agreement between the bank and federal regulators.

Wendell P. Shelton remains free on $25,000 bond. He declined to comment after his arraignment Friday on one count of bank fraud and eight of making false entries in records of the bank, which regulators shut down in 1986.

A federal indictment accuses Shelton of falsifying books in connection with loans made to a Florida developer in 1985.

Regulators were concerned about Sun Belt's lending practices, and the bank had agreed to get the Federal Home Loan Bank Board's approval for any loans of more than $1-million.

The bank fraud count also accuses Shelton of violating limits on the amount that may be lent to one borrower by making and concealing three $1-million loans to a developer in West Palm Beach.

Three firms controlled by the developer each allegedly received one of the loans, according to the indictment. Shelton is accused of scheming to conceal the fact that the developer would benefit from all three loans.

Shelton, who served for a decade on the bank's board of directors, also faces a civil lawsuit filed in 1986 by federal regulators.

Attorneys for the Federal Deposit Insurance Corp. are seeking damages from Shelton, other Sun Belt officials and their insurer.

The civil trial is scheduled for this spring.