Wednesday, February 10, 2016

FNB Director Dirty Business Just Won't Go Away and Plains Capital Bank plays along!


Jury finds Edinburg bank

defrauded businessman

When First National Bank of Edinburg agreed to loan $1.7 million to a Pharr businessman to build a cold-storage facility in 2011, it came with a catch.
Under terms set by First National, Ricardo Diaz Miranda had to purchase two apartment complexes and a house if he wanted the loan. The bank, though, would provide Diaz with 100 percent financing — almost $6.8 million — to buy the three properties in Hidalgo County. Anxious to get his business started, Diaz agreed to the bank’s conditions.

What Diaz didn’t discover until much later was that the bank pawned off on him the two apartment complexes, which were part of its burgeoning foreclosed real estate portfolio. He also would later learn the house he purchased was sold by a company headed by Saul Ortega, First National’s chairman and CEO, before federal regulators seized the bank and sold most of its assets to Dallas-based PlainsCapital Bank in 2013.
 (just get these damn apartments and this home off my books so I can screw you and cook my books....trust me, you'll get 100% financing! )

Last week, a Hidalgo County jury found First National, or FNB, guilty of defrauding Diaz on the loan transactions. The jury determined Diaz was not on the hook for about $7.4 million that PlainsCapital claimed it was still owed on the loans, though jurors declined to award him punitive damages.
Reynaldo Ortiz, Diaz’s lawyer, said PlainsCapital “went after” Diaz “knowing that these were rotten notes.”  “The fraud wipes out the deficiency, but (PlainsCapital) tried to collect anyway,” Ortiz said. “They don’t get to profit from FNB’s fraud.”

Charles Murray, a lawyer for PlainsCapital, declined to comment through an assistant.
Ortega and his lawyer did not respond to requests for comment.
FNB, at one time Texas’ 12th largest bank with $3.4 billion in assets, was shut down by regulators one year shy of its 80th anniversary. It had been plagued by mounting losses, dwindling capital, bad loans and various legal troubles. Its closing cost the Federal Deposit Insurance Corp.’s insurance fund $637.5 million.
Eight months following the bank’s demise, the Treasury Department’s Office of Inspector General outlined numerous problems in a postmortem audit looking at the causes of the bank’s failure and how the Office of the Comptroller of the Currency missed some of the bank’s troubles, including questionable banking practices.

Among them: The bank had masked problems in its foreclosed real estate portfolio by financing sales on “liberal terms,” including not requiring borrowers to put money down — just like with Diaz.

The bank also violated accounting rules in how it booked those sales, overstating earnings in the process.

First National required Diaz to buy the two apartment complexes in McAllen and Mission for a combined $6.5 million, even though he had no experience as an apartment manager, Ortiz said. Diaz was a lawyer in Mexico before he came to Texas. He is now a U.S. citizen, Ortiz said.

Diaz was never able to generate any income on the apartments. Within days of acquiring the FNB’s assets, PlainsCapital posted the two apartment complexes, the house and the cold-storage facility for foreclosure. Diaz subsequently filed suit against PlainsCapital and Ortega, and obtained a temporary restraining order preventing the foreclosure.

PlainsCapital moved to foreclose on the cold-storage facility even though Diaz was making payments because the property was used as collateral on the apartment complexes as well, Ortiz said.

As the litigation unfolded, Ortiz said, a judge granted Diaz permission to the sell the apartment complexes, which were sold for $3 million and $750,000, far short of what he owed on the loans. PlainsCapital countersued, seeking to collect on the unpaid balances.
As for the house in La Joya that Diaz bought from Ortega’s Pelon LLC for $270,000, Ortiz said Ortega agreed to buy it back for the same amount last year. Therefore, Ortega was dismissed as a defendant in the lawsuit.
Ortega was subpoenaed to testify at last week’s trial, but law enforcement officials couldn’t find him to serve the subpoena, Ortiz said.

State corporate records show Ortega is chairman of MNB Ventures Inc., the holding company for Texas National Bank in Mercedes.
As for Diaz’s Castelo Cold Storage, which receives produce shipped from Mexico before being transported to such grocers as H-E-B and Walmart, jurors found he owes about $1.5 million on that loan — less than the $2.2 million that PlainsCapital said Diaz owed, according to Ortiz.
Ortiz said he hasn’t heard whether PlainsCapital will appeal the jury verdict.


2 comments:

  1. Even with big fraud on the Record. Where is the FEDS
    ?????

    ReplyDelete
  2. p danner aint written nothing about this case for a long time. is he still doing this blog??? he going to quit like carlos???

    ReplyDelete