The former chief executive and chairman of Bank of the Commonwealth in Norfolk, Va., has been sentenced to 23 years in federal prison for spearheading a fraud scheme that led to the failure of the bank.
Edward Woodward was also ordered to pay more than $333 million in restitution to the Federal Deposit Insurance Corp. for losses stemming from the bank failure, according to a Wednesday press release from the Special Inspector General for the Troubled Asset Relief Program.
Woodard concealed the crumbling financial condition of Bank of the Commonwealth by offering troubled borrowers preferential treatment in exchange for favors, according to prosecutors. Those borrowers testified during Woodard's 10-week trial this spring that they had purchased bank-owned property using loans from Bank of the Commonwealth, bought Woodard's personal condominium at an inflated price using bank loans and bailed out Woodard's son, Troy, of failed real estate investments.
The failed-bank chief gave $11 million in loans, without board approval, to a bankrupt borrower who was under investigation by a federal grand jury and later doctored bank records to hide the deception, prosecutors say.
Woodard also allegedly used $100,000 in bank funds to pay for his son's legal fees, renovations to his son's home and fraudulent commissions.
Woodward was convicted of conspiracy to commit bank fraud, false entry in a bank record, unlawful participation in loans, false statements to a financial institution, misapplication of bank funds and bank fraud. He was sentenced by U.S. District Judge Raymond Jackson in the Eastern District of Virginia.
Several others involved in the fraud scheme also face prison sentences. Woodward's son, Troy, who served as a vice president at Bank of the Commonwealth, was sentenced to eight years in prison and ordered to pay $2.4 million in restitution to the FDIC and forfeit more than $4 million in proceeds from the fraud in October. Stephen Fields, a former senior loan officer at the bank, was sentenced to 17 years in prison in September. Bank customer Dwight Etheridge was also sentenced to four years in prison that month.