In the six years since his plan to acquire a rival institution failed, the president of a Connecticut thrift has been at the center of a bizarre revenge scheme, according to lawsuits filed by former associates.
William R. Wilcox Jr. resigned last month as president and chief executive of Willimantic-based Savings Institute under a barrage of lawsuits alleging that he had tried to smear the reputation of William J. McGurk, president of Savings Bank of Rockville. The two thrifts had planned to merge in 1989.
In lawsuits filed by two men who had worked at Savings Institute, Mr. Wilcox was accused, among other things, of trying to uncover disparaging information about Mr. McGurk by hiring a private detective. The lawsuits also allege that he tried to persuade the two men to plant cocaine on Mr. McGurk and then call the police.
Banking colleagues have expressed surprise at the charges against Mr. Wilcox, who was chairman of the Connecticut Savings Bank Association from 1990 to 1991.
"This all comes as a shock to everyone," said Gerald M. Noonan, president of the Connecticut Bankers Association, which has since merged with the thrift group. "Disgruntled employees situations are always a bit delicate if they get out of hand, but this one borders on the bizarre."
Banking regulators are looking into the charges, according to a source familiar with the situation, who said that subpoenas have been issued by the Federal Deposit Insurance Corp. to several officials and former employees of the thrift.
James V. McFarland, deputy director of the FDIC's regional office in Massachusetts, declined to confirm or deny that his office was investigating the thrift. He said a recently completed FDIC exam turned up no safety-and-soundness problems at the 153-year-old institution.
The two plaintiffs, one the president of an independent securities firm that operated in the thrift's branches, charged that Mr. Wilcox dismissed them after they refused to cooperate with the alleged plot to discredit Mr. McGurk. The men claimed that Mr. Wilcox also threatened them if they revealed any details.
Mr. Wilcox, however, has filed countersuits against both men, alleging slander. In his suits, Mr. Wilcox denied the allegations, which he said were made by disgruntled ex-employees intent on ruining his reputation.
To top it off, a fifth lawsuit was filed by former chief financial officer Robert Costa. It accuses the thrift and Mr. Wilcox of violating accounting rules and banking laws and then firing Mr. Costa because he complained and refused to cooperate in fudging the thrift's books to show a profit.
The story has made headlines throughout Connecticut - especially in Willimantic, population about 40,000, in the northeastern quadrant of the state.
The public embarrassment forced Mr. Wilcox' resignation in early June.
"It's a new area for us," admitted Savings Institute chairman Henry P. Hinckley. "We're a small community."
Mr. Hinckley declined to discuss the allegations or Mr. Wilcox' resignation. Mr. Wilcox could not be reached for comment.
"I totally missed the apparent animosity the lawsuits brought out," said Mr. McGurk, the target of the alleged schemes. "It never occurred to me. The whole thing is unfortunate. It's bizarre; it's been an embarrassment to me."
The plot allegedly developed after merger talks between Savings Institute and the Savings Bank of Rockville fell through in 1989. The lawsuits say the deal fell through because of a disagreement about whether the new entity would be headed by Mr. Wilcox or Mr. McGurk.
According to the lawsuit filed by the brokerage firm president, Kenneth A. Foisie, Mr. Wilcox believed he had been "set up" by Mr. McGurk. Mr. Wilcox accused the Rockville executive of violating an informal agreement that would have put the Savings Institute CEO in charge after the merger, the lawsuit says.
Talks were restarted in 1992, but Mr. Wilcox, allegedly vowing revenge, "engaged in a scheme to discredit Mr. McGurk and destroy Mr. McGurk's career and reputation" in order to guarantee that Mr. Wilcox would be president of any merged entity, the lawsuit says.
In an effort to "find 'dirt' on Mr. McGurk" and "publicly portray Mr. McGurk as a drug user and a criminal," the complaint says, the Savings Institute CEO directed Mr. Foisie to funnel thrift funds through his brokerage to pay for a private investigator. He also instructed Mr. Foisie and former senior vice president Leonard Morganson to plant cocaine in Mr. McGurk's car and then tip off the police, the suit alleges.
The suit says that the two men refused to participate in the plot, and that this refusal led Mr. Morganson's dismissal in 1993.
In his own suit, Mr. Morganson has also accused Mr. Wilcox of "intimidating and harassing" him at his new office, in nearby Plainfield, prompting Mr. Morganson to contact the police. Mr. Wilcox at one juncture "menacingly" told Mr. Morganson that he had "bought a gun," according to court documents.
And after Mr. Foisie refused to defend Mr. Wilcox against Mr. Morganson's charges of wrongful dismissal, Mr. Wilcox allegedly accused Mr. Foisie's firm of defrauding the bank of revenues the two companies were supposed to share under their 1989 agreement.
Mr. Foisie defended his firm before the thrift's board of directors in a memorandum and described the plot against Mr. McGurk, the suit says. In the memo, he also accused Mr. Wilcox of using the thrift for personal gain and taking an advance from the brokerage firm to cover an unexpected deficit in 1992.
According to the lawsuit, Savings Institute responded in October 1993 by seizing the brokerage firm's books and other property, terminating the contract, and referring all customers to a new brokerage company Mr. Wilcox had allegedly started to take over the firm's business.