Jury convicts bankers

PANAMA CITY — After nearly three weeks of trial culminating in about nine hours of deliberation, jurors convicted three former leaders for their roles in a fraudulent loan that cost the Federal Deposit Insurance Corporation millions.

Terry Dubose, 66, of Panama City Beach, was convicted of all 12 counts with which he was charged in a federal indictment handed down last summer. Dubose was the president and CEO of Coastal Community Investments, a holding company that owned Panama City Beach-based Coastal Community Bank and Port St. Joe-based Bayside Savings until the banks failed in 2010.

Elwood “Woody” West, 40, of Monroeville, Ala., was acquitted on the conspiracy count and convicted of the 11 other counts. West was Coastal’s chief financial officer and owned shares of the company.

Frank Baker, 62, of Marianna, was Coastal’s attorney and a member of its board of directors. He was convicted on eight counts and acquitted on three counts of wire fraud and one count of making a false statement to the FDIC.

All three men could each be sentenced to up to 30 years in prison and could have to forfeit property as a result of their convictions. Judge Richard Smoak scheduled a sentencing hearing for all three men July 17. They are free on bond until then.

A felony conviction disqualifies someone from being a member of the Florida Bar, so the Jackson County Board of County Commissioners will have to find a replacement for Baker, who has served as county attorney even since his indictment.

Each of the men had pleaded not guilty to one count of conspiring to commit wire fraud against the FDIC, seven counts of wire fraud, three counts of making false statements to the FDIC and one count of aiding and abetting a false claim against the United States.

The indictment alleged the three men misled lenders to get an FDIC guaranteed loan to avoid default on a separate outstanding debt, and then mislead the FDIC about the nature of the company’s debt.

When Coastal failed to repay the debt, the FDIC repaid more than $3.8 million to the lender. A month later, the FDIC seized both banks. The bankers were motivated by a desire to avoid the personal losses they would incur if the banks failed, prosecutors argued.