Magazine article American Banker

Illinois Chairman Ends 40-Year Career by Agreeing to FDIC Ban and $65,000 Fine

Magazine article American Banker

Illinois Chairman Ends 40-Year Career by Agreeing to FDIC Ban and $65,000 Fine

Article excerpt

Paul E. Utterback looked as if he were gracefully retiring from a 40-year banking career, until regulators accused him of bilking the bank he chaired.

He announced his resignation as chairman, director, and controlling shareholder of $147 million-asset Bank of Alton, Ill., in November. Shortly thereafter, the Federal Deposit Insurance Corp. fined him $65,000 and barred him from banking. The agency had accused him in February of unduly enriching himself and his company through loans and questionable relationships with the bank.

Without admitting or denying the allegations, Mr. Utterback agreed to the order and to pay the $65,000, amended from an original fine of $155,000.

In a prepared statement, Mr. Utterback said he was "well acquainted with banking regulations."

"I have never intended to do anything wrong," he said. "In fact I am quite bewildered by the FDIC's position, particularly because their criticisms were of minor administrative matters and were based on questionable technical interpretations of banking laws."

According to FDIC documents, allegations against Mr. Utterback include purchasing more than $9 million in split-dollar life insurance policies without authorization, resulting in excessive compensation. He received undisclosed commissions on the sale of the policies in which the bank pays the premiums and is reimbursed from dead benefits or cash surrender value.

The FDIC also said the 71-year-old chairman changed the beneficiary of bank-owned life insurance policy to his own company, Midwest Financial Planning, without telling the bank's board. …

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