John G. Squires had known nothing but success during his 30-year career, launching two community banks in Orlando and selling both for huge gains.
The third time, however, was no charm.
Old Southern Bank failed after just four years. Its leaders, including Squires, were accused by regulators of taking huge risks, and by shareholders of lying about the institution's health.
Squires did not return a message left with his attorney.
Things started off well.
Within eight months, the bank had $100 million in assets. In 30 months, it had $330 million.
The growth was fueled by loans to developers who bought land and built everything from single-family homes to office buildings. Old Southern often used independent brokers who found customers in markets outside its region.
State regulatory reports show
that employees failed to verify the financial information provided by at least one of these brokers — which meant there was no way for Old Southern to know if the borrower really had the ability to repay.
And when state examiners went through loan files, they found that 80 percent were missing important documents that included tax returns, financial statements and outstanding lien records.
Inside the bank, there was turmoil.
The president, Sandra Jansky, complained to regulators that she wanted to fire a loan officer because he'd made poor decisions and "had a bad attitute with employees and even with clients." But she was blocked by Squires, the chief executive, who had worked with the loan officer for years, state examiners reported.
By 2007, just two years after Old Southern opened, board member John Ritenour was openly calling for Squires' firing — a battle that Squires won when he had Ritenour voted off the board, according to reports in the Orlando Sentinel.
After Old Southern failed, the fight moved to Orange County Circuit Court. A suit filed by Ritenour and 21 other investors says shareholders bought $7 million in stock based on faulty information about Old Southern's health.
Shareholders complained that Squires did not tell them how many risky development loans were on the books or how many had already gone bad.
Attorneys for Squires filed a motion to dismiss the case. It remains pending.