Published: Saturday, Jun. 27, 2009

Updated: Saturday, Jun. 27, 2009

Bank fraud conspirator hit with FDIC order

Coon charged in Coast Bank scheme

By BRIAN NEILL

bneill@bradenton.com

Federal banking regulators have ordered Philip Coon, the man who helped mastermind a scheme to defraud borrowers of the former Coast Bank, to have nothing to do with other people’s money ever again.

The order of prohibition from further participation issued by the Federal Deposit Insurance Corp. in May was made public Friday.

It states that Coon will no longer be able to participate in the affairs of any insured depository institution or other financial institutions.

Coon’s attorney, James Felman of Tampa, said his client did not contest the order.

“We stipulated that. We didn’t contest it,” Felman said. “We agreed to it. As I said before, Mr. Coon is very remorseful for his behavior. He has accepted responsibility for it, and he’s never denied it.”

Coon awaits sentencing for his part in a scheme that skimmed proceeds from an extra point charged on mortgages issued by Coast Bank.

He conspired with John Robert Miller, who owned a mortgage company in Tampa called American Mortgage Link.

Coon, who oversaw residential loans at Coast Bank, aggressively grew mortgages on homes that were mostly built by a sole developer who later claimed bankruptcy.

The fraudulent dealings on the part of Coon and Miller, who also awaits sentencing, contributed to the bank incurring more than $100 million in bad loans — some made to borrowers whose homes were never even started.

Coast Bank almost failed but found a last-minute reprieve in a shareholder-approved sale to Missouri-based First Bank.

Coon and Miller both pleaded guilty to the charges against them, but their sentencings have been put on hold while attorneys in the case await a decision from the 11th Circuit Court of Appeals regarding a request for rehearing of the case.

The court in December had sided with Sarasota attorney Alan Tannenbaum’s argument that in excess of 100 borrowers were entitled to proceeds from roughly $1.5 million that Coon is to forfeit as part of his plea agreement.

Prosecutors argued that money should go to the bank because Coon had deprived the institution of honest services.

After the appeals court ruling, Felman filed a motion to ask for a re-hearing of the case. He said Friday he is still waiting for a ruling.

“It could be today, it could be several months from now,” Felman said. “And depending on how it (the court) rules, it may necessitate further proceedings or it may not.”

Tannenbaum said he, too, was waiting on the ruling. He was not surprised by the order from the FDIC regarding Coon.

“Having admitted in his federal criminal prosecution to conspiring with John Miller, the mortgage broker, to skim a point from each Coast Bank loan procured by the mortgage broker and then splitting the point with the mortgage broker for their personal use, this action by the FDIC comes as no surprise,” Tannenbaum said.

Felman said Coon is still living in Bradenton.

Property records show that Coon maintains a homestead exemption on his home on 51st Street Northwest with a market value of $574,974 and the taxes are current.