Arguments underway in bank trial

PANAMA CITY — After two weeks of often dense testimony about banking rules and regulation, the prosecutor Tuesday told jurors the case against three leaders of a failed local bank is actually quite simple.

“The defendants wanted something that they were not entitled to, and they lied to get it,” Assistant U.S. Attorney Gayle Littleton said Tuesday during her closing arguments in the trial of Terry Dubose, Frank Baker and Elwood West.

Dubose, Baker and West were charged last summer with 12 felony counts in an indictment accusing them of conspiring to defraud the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Program (TLGP).

The three men were officers or directors for Coastal Community Investments, which owned Coastal Community Bank and Bayside Savings until the two banks failed in 2010. They sought and obtained a $3.75 million loan in late 2008 under the TLGP for which the bank was ineligible, and the FDIC had to repay the loan when the bank failed.

Littleton finished presenting evidence Tuesday.

“The government has failed to prove its case,” was the retort from defense attorney Claire Rauscher, who is representing Dubose, when she began her closing arguments.

Rauscher highlighted what she described as a lack of evidence of any conspiracy or motive, the numerous mistakes made by witnesses who have not been charged with a crime, and what she described as the confusing rules of the TLGP, which guaranteed loans from one bank to another under certain circumstance.

Finally, she said, Dubose did nothing to conceal any of his actions.

“He wasn’t hiding what he did,” Rauscher said. “He wasn’t hiding what the bank did, because there was nothing to hide.”

Rauscher said Littleton’s contention that Coastal needed the loan to avoid going under was not supported by the evidence. The bank was in bad shape, Rauscher conceded, but in late 2008 nobody suspected the economy would take so long to recover.

“In 2008, the bank was not in dire straits,” she said.

But Littleton said the bank was in serious trouble and Dubose, West and Baker knew it at the time. They knew they had put the banks up as collateral for a 2007 loan that needed immediate repayment, she said.

“This is not a loan that … these three men are going to make lightly,” she said.

As evidence of their intent, Littleton pointed to the fact that the bank didn’t follow procedures and report the loan to the FDIC until they were under intense pressure from the lender.

Court recessed slightly earlier than normal in the afternoon after defense attorney James Judkins expressed concern that they would not be able to speak to the jury in the morning before Littleton’s rebuttal if they finished their closing arguments Tuesday evening.

Attorneys for West and Baker haven't delivered their closing arguments. Jurors are expected to begin deliberating Wednesday.