The Atlanta Journal-Constitution
Atlanta’s downtrodden neighborhoods proved a gold mine for Omni National Bank and its founders, who amassed tens of millions of dollars’ worth of mansions, company stock and a private jet after launching an unusual bank that financed renovations of inner-city houses.
But the only thing growing at Omni these days is the list of casualties racked up since the bank’s failure 10 months ago.
Hundreds of homes that should have been improved instead sit vacant and crumbling. Though most depositors weren’t hurt, the bank’s demise has cost the Federal Deposit Insurance Corp.’s insurance fund an estimated $289 million and wiped out shareholders who owned about half the company, once valued at about $100 million.
Meanwhile, the number of Omni-related arrests has reached four, including the bank’s co-founder, Jeffrey L. Levine, who pleaded guilty to bank fraud two weeks ago.
The story of Omni’s rapid rise and sordid fall goes far beyond the usual tale of woe at Georgia’s many failed banks, where risky loans blew up when the real estate bubble burst. More people may be charged in the wide-ranging probe of Omni, and the charges already filed suggest fraud pervaded the bank’s operation.
Federal prosecutors said in court filings that bank records, for instance, were routinely doctored to hide losses, and a loan officer took kickbacks in return for doling out loans. The bank allowed people to “flip” houses three, four and even five times, artificially inflating their value, prosecutors said.
Omni also has been linked to at least two large mortgage fraud operations uncovered by regulators, one involving an ex-con who stole multiple identities and another by a Lithonia man who falsified the income and employment records of borrowers he steered to Atlanta-based Omni.
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http://www.ajc.com/business/bank-leaves-trail-of-287645.html
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