Community National Bank at Bartow concentrated on some of the most dangerous deals a bank can make: construction loans to speculators who want to build a home and quickly sell it at a profit.
Among these speculators: the Phan family, Californians who invested in vacant Port Charlotte lots in 2006.
Court records show that Lily, Sally, Sandy and Thomas Phan — all residents of Elk Grove, Calif. — bought four lots for a total of $228,000 in early 2006. They then received construction loans totaling $850,000 from Community National.
Their plan was to build houses in the already crowded Port Charlotte market.
But by August 2007, the Phans had stopped paying on the loans and Community National was forced to foreclose.
None of the Phans could be reached for comment. Their numbers in California have been disconnected.
"As a result of this growth strategy and weak risk management, Bartow experienced significant asset deterioration beginning in 2008," the FDIC's Office of Inspector General wrote in its November 2010 report.