MONROE, La. -- Two North Louisiana men have been convicted of bank fraud that results in a loss of over $3 million by several financial institutions.
Charlie L. Simpson, 51, of Downsville, and Charles D. Gardner, 56, of West Monroe, were each found guilty Tuesday by a federal jury in Monroe of one count of conspiracy to commit bank fraud. After two days of deliberations, the jury also found Simpson guilty of four counts of bank fraud.
The court declared a mistrial as to the remaining four counts of bank fraud against Gardner. Chief U.S. District Judge Terry A. Doughty presided over the two week trial.
Simpson worked as the chief operating officer of United Home Care, Inc. and Trinity Home Health Care, Inc., and Gardner worked as the chief financial officer/controller of United and Trinity.
According to testimony during the trial, from April 2016 until March 2017, Simpson and Gardner conspired together to defraud Origin Bank, Peoples Bank and Louisiana National Bank by fraudulently obtaining money and credits from the three banks.
Simpson and Gardner orchestrated and executed a check kiting scheme between accounts at Origin Bank and LNB where they deposited hundreds of checks between multiple accounts they controlled at both banks and took advantage of the float when they passed the checks, timing the exchanges to artificially inflate the account balances.
As a result of this scheme, Simpson and Gardner caused Origin Bank and LNB to honor checks and payments drawn against accounts with insufficient funds and put the financial institutions at risk.
Additional testimony revealed that on March 8, 2017, Simpson learned that accounts under his control at LNB had an overdraft and the bank would only accept a certified check to cover the deficit. To cover that and prevent the kite from collapsing, Simpson and Gardner added a third bank, Peoples Bank, into the scheme by issuing over 20 checks for approximately $4 million drawn from different accounts at that bank and deposited them into multiple accounts at Origin Bank.
However, the accounts used at Peoples Bank had less than $2,000 available and did not have sufficient funds to cover the checks deposited into Origin Bank. The following day, Simpson used the artificially inflated balances to obtain four certified checks totaling $2.1 million from Origin Bank and deposited them into different accounts at LNB to cover the overdraft. Origin Bank suffered a financial loss when it discovered that the pair had used the inflated accounts to obtain certified funds.
Simpson and Gardner each face a sentence of up to 30 years in prison, a fine of up to $1,000,000, or both. Sentencing is set for Aug. 7.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Leon H. Whitten and Brian C. Flanagan, and Criminal Chief Allison L. Duncan.
