State examiners found that Cortez Community Bank repeatedly broke the law but no one from this Brooksville lender was ever arrested or charged with a crime.
In fact, regulators found so many violations that they once questioned whether bank executives had a "working knowledge of the laws."
The Hernando County bank let one director overdraw his account by more than $75,000, and it gave another a loan much larger than the law allowed.
Although the action was not illegal, the bank also lent money to a home builder who settled four lawsuits accusing him of copyright infringement. It helped friends of the chairman profit even as the bank was collapsing. And it was prepared to give a loan to a convicted child pornographer until Hernando County blocked the deal.
Cortez Community opened in January 2004 and was run by some of the highest-profile citizens in Brooksville. The chairman was Tom Hogan Jr., a lawyer whose clients and friends later became bank customers.
Among these was Travis Lee Sanders, who spent time in prison for sexual battery on a minor, possession of child pornography and trafficking in stolen goods, court records show.
Sanders was a business partner of Hogan's and was set to receive a loan from the bank and funds from Hernando County to relocate his company. The deal fell apart when county officials learned of Sanders' past,
the Tampa Bay Times reported.
But another lucrative deal with one of Hogan's clients went through — and helped a builder inflate the value of 35 acres off Broad Street in Brooksville and earn millions in the process.
In May 2006, a company belonging to James W. DeMaria bought land for $1.4 million and sold it to another of his companies that same month for $2.3 million.
Five months later, DeMaria sold the property to a buyer for $4 million, and that buyer received a $3.7 million loan from Cortez Community.
It is not clear whether officials at the bank knew the land had nearly tripled in value from May to October.
Officers and directors did not return phone calls and DeMaria's number has been disconnected.
Companies controlled by DeMaria continued doing business with Cortez after the transaction, collecting $3 million in loans from the bank. DeMaria even received a renewal on $1.15 million two years after one of his companies filed for bankruptcy protection. He ultimately defaulted on that amount.
Meanwhile, the bank allowed one of its directors, real estate broker Terry Bickel, to provide appraisals.
Bickel valued property for 28 loans that totaled $11.3 million and most of the valuations were inappropriate, regulators found.
One of those appraisals benefited DeMaria.
In July 2009, an independent appraiser valued DeMaria's land at $740,000.
Just a year later, as real estate prices were slipping across Florida, Bickel valued the same land at $1.38 million to justify the developer's $1.15 million loan.
"This could appear as a conflict of interest because Bickel sits on the loan committee and has a vested interest in preserving the bank's capital as a shareholder," regulators wrote in 2010.
Bickel declined to comment.
"At this point in the game, I'd better not say anything," he said.