A Nashville man has pleaded guilty to charges that he defrauded Chattanooga-based Cornerstone Community Bank.
In a news release, John A. Horn, acting U.S. attorney for the Northern District of Georgia, said Grady Wayne Fricks, 65, used his relationship with a senior bank employee to “obtain a fraudulently inflated loan.”
“Fricks’ ability to manipulate people to further his scheme left the bank and its stockholders shouldering the loss,” Horn said.
The release said that in November 2004, Fricks contacted a senior vice president at Cornerstone with whom he had a cozy relationship and asked for an $850,000 loan to buy property in Ringgold, Ga.
Fricks didn’t tell the banker he had signed a contract to buy the property for $425,000. The banker broke company policy by not requiring a copy of the sales contract, and then the banker allowed Fricks to pick his own appraiser. Fricks paid the appraiser $1,000 plus a $100 “tip” to inflate the value of the property.