The former president and chief executive of a failed bank in Savannah, Ga., has pleaded guilty to a conspiracy charge in a loan-fraud scheme.
Heys Edward McMath III changed his earlier plea of not guilty as part of an agreement with federal prosecutors, according to court documents filed Wednesday in the U.S. District Court in the Southern District of Georgia. The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine.
McMath, who is currently unemployed and lives with his wife, remains free on bail, according to a report Wednesday in the Savannah Morning News. His sentencing date has not yet been determined.
McMath was at the helm of the First National Bank of Savannah when he allegedly colluded with six former bank officers to hide millions of dollars in nonperforming commercial real estate loans in the aftermath of the economic downturn, according to the January indictment.
McMath and other officials made fake loans that were partly used to repay soured loans taken out by other borrowers, according to the indictment. They also allegedly covered up commercial lending losses before a March 2009 bank examination by the Office of the Comptroller of the Currency.
First National Bank eventually failed in June 2010, costing the Federal Deposit Insurance Corp. more than $90 million.
The bank's former vice president and chief credit officer, Jay Gardner, pleaded guilty on Oct. 25 to bank fraud charges and awaits sentencing. The five remaining bank officers have each pleaded not guilty; their trial is scheduled to begin Jan. 27.