Case: United States v. Woodard, et al.
Issue: Whether the federal district court properly sentenced former Bank of the Commonwealth executives for conspiracy to commit bank fraud.
Case Summary: The Fourth Circuit upheld the criminal convictions of former Bank of the Commonwealth (the Bank) CEO Edward J. Woodard, Vice President Stephen G. Fields, and Vice President Troy Brandon Woodard (collectively former executives) for their conspiracy to commit bank fraud in masking the Bank’s troubled assets leading up to its collapse in September 2011.
In July 2012, the U.S. Department of Justice (DOJ) charged the former executives with bank fraud in connection with their conspiracy to hide the financial condition of the Bank’s nonperforming assets. Specifically, the DOJ alleged that the former executives intentionally overdrew demand deposit accounts and used those funds to make loan payments or extend new loans, and provided preferential financing to troubled borrowers to purchase bank-owned property. The DOJ claimed in its indictment that the Bank lost approximately $115 million between 2008 until its collapse in 2011.
Following a ten-week trial in Norfolk district court, the jury found the former executives guilty of bank fraud and other financial crimes. The district court sentenced CEO Woodard to 23 years imprisonment, Vice President Fields to 17 years, and Vice President Woodard to 8 years.
The former executives appealed their convictions to the Fourth Circuit raising evidentiary and procedural objections to the district court’s decision. The three-judge panel for the Fourth Circuit unanimously affirmed the district court’s ruling, holding that the district court committed no reversible legal errors, and the DOJ presented “ample evidence” to support a conspiracy.
Bottom Line: On June 19, 2015, the former executives filed petitions for a panel rehearing, arguing that the panel’s decision overlooked important facts in the record and ignored Fourth Circuit precedent. As of July 1, 2015, the Fourth Circuit has not yet issued a ruling.