The bank’s former CEO is accused of violating lender policies and causing millions of dollars in losses.
Federal Reserve He says Former Eufaula Bank CEO Thomas Engelbrecht caused losses of more than $3.5 million by funneling millions into a struggling company owned by a 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 company was completely unable to repay its loans or cover its overdraft.
The Federal Reserve’s coronavirus-era Main Street lending program, which supports small businesses, lost $1.88 million in its share of funding.
Engelbrecht also loaned his close relative’s business nearly $200,000, deepening conflict-of-interest issues.
According to the Federal Reserve, Engelbrecht handled his relative’s business favorably despite facing “obvious financial difficulties,” putting Eufaula Bank at significant risk.
“… Engelbrecht’s conduct constituted violations of law or regulation, breach of fiduciary duty, unsafe or unsound banking practices, and involved personal dishonesty or a manifestation of willful or persistent disregard for the safety and soundness of the bank…”
The Federal Reserve Bank decided to ban Engelbrecht from working in the American banking sector, and fined him $125,000.
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