A former Bank CEO is accused of violating the lender’s policies and causing millions of dollars in losses.
The Federal Reserve says former Bank of Eufaula CEO Thomas Engelbrecht triggered over $3.5 million in losses by steering millions to a struggling business belonging to a close relative.
Between 2020 and 2023, the Fed says Engelbrecht also repeatedly approved large overdrafts for his close relative’s business, even when the account was already overdrawn by large amounts and in violation of bank policy.
The business was completely unable to repay its loans or cover the overdrafts.
The Federal Reserve’s COVID-19-era Main Street Lending Program, which supported small businesses, lost $1.88 million on its portion of the financing.
Engelbrecht also loaned his close relative’s business close to $200,000, further deepening the conflict-of-interest issues.
According to the Federal Reserve, Engelbrecht treated his close relative’s business preferentially despite facing “evident financial difficulties,” placing the Bank of Eufaula at great risk.
“…Engelbrecht’s conduct constituted violations of law or regulation, breaches of fiduciary duty, or unsafe or unsound banking practices, and involved his personal dishonesty or demonstrated his willful or continuing disregard for the Bank’s safety and soundness…”
The Federal Reserve is banning Engelbrecht from the US banking industry while fining him $125,000.
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This post Bank CEO Allegedly Triggers $3,500,000 Loss After Giving Loans to Relative’s Struggling Business may be modified as updates unfold.
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