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CEDAR RAPIDS - A former Springville bank president who attempted to hide bad loans from a federal bank examination was sentenced Monday to five years of federal probation.
Cecil Capper, 74, of Marion, president of The Exchange State Bank in Springville from 2009 to 2013, pleaded guilty in June to aiding and abetting the obstruction of a Federal Deposit Insurance Corp. investigation.
Evidence at sentencing shows Capper, in December 2010, prepared a handwritten memo and made an entry in the bank's computer system falsely stating that The Exchange State Bank assumed a $500,000 loan from another affiliated bank, Center Point Bank & Trust.
Capper did this in connection with a former vice president of Center Point, Martin Smith, also convicted of deceiving regulators.
Capper and Martin were directed by another person, according to court documents. That person wasn't identified.
Capper participated in the scheme to conceal underlying delinquent loans from FDIC scrutiny, prosecutors said. The bank was unable to collect on the majority of the $500,000 loan, ultimately losing $462,304.
Smith, 39, pleaded in June to aiding and abetting the obstruction of a financial institution. He backdated loans to deceive regulators and made loans for larger, unauthorized amounts in an attempt to avoid bank regulations, according to evidence at sentencing.
Smith was sentenced to one year in federal prison and ordered to pay more than $1.2 million in restitution.
U.S. District Judge C.J. Williams sentenced Capper to five years of probation and ordered him to pay $462,304 in restitution.
The case was prosecuted by Assistant U.S. Attorney Tony Morfitt and investigated by the FDIC's Office of Inspector General and the U.S. Secret Service.
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