Sun American Bank bought troubled banks and wound up inheriting many of their problems. But, by some accounts, it also created plenty of its own.
State examiners found that the Boca Raton bank broke the law by giving more money to borrowers than was allowed, and by accepting deficient appraisals.
It also gave customers fresh loans after they'd defaulted, and paid bank insiders — including the chief executive's son and ex-wife — handsomely even as Sun American was struggling.
Documents filed with the Securities and Exchange Commission show that CEO Michael E. Golden was paid $2.9 million in a three-year period — among the highest salary-and-benefit packages for community bankers in Florida.
The bank's six directors each received about $50,000 in director's fees annually from 2006 through 2009, and about $9 million in loans from the bank.
When it came time for Sun American to raise money through stock offerings, Golden's ex-wife and his son reaped the rewards. Brett Golden's stock brokerage earned about $2 million from one of the lender's stock offerings, while a brokerage owned by the ex-wife, Christine, took home about $640,000.
Even Golden's brother, Ron, benefited.
He was hired in October 2005 as vice president of construction lending. In 2007, he received a $105,000 base salary, an annual performance bonus of $6,000 and a car allowance of $7,200.
There is nothing in regulatory reports to indicate that these deals with family members were illegal or created a conflict of interest.
Three calls to Michael Golden were not returned.
Launched in December 1987 as PanAmerican Bank, the lending institution was originally owned by an Ecuadorian family that got in trouble in the late 1990s for allegedly siphoning money out of that South American country.
The bank struggled until 2002, when Golden joined an investment group that purchased it two years earlier.
Over the next five years, PanAmerican bought four small South Florida banks, grew its asset base to nearly $600 million and changed its name to Sun American.
When the real estate market turned, bad loans from the various banks that Golden purchased began showing up on Sun American's books.
At the same time, state regulators said, Sun American lent far more than its lending limit to at least two borrowers and broke laws regarding appraisal standards. It accepted appraisals from companies that had been hired by the borrowers — and not by the bank — and ordered appraisals after money had already been allocated.
Regulators also criticized the bank for failing to properly investigate where its money was headed.
In 2007, the bank lent $655,000 to a customer who was in default on $39 million to other banks. It gave $100,000 to a borrower who already had $900,000 in outstanding loans — and whose only source of income was Social Security.
Regulators shuttered Sun American in March 2010.
Seven months later, shareholders of one of the banks bought by Sun American sued Golden, alleging fraudulent inducement.
The former owners of Beach Bank said that Golden convinced them to sell based on false statements about Sun American's financial well-being and disciplined management.
"As it turns out, Sun American Bank was grossly undercapitalized, its financial statements were materially misstated and it was not in compliance with federal and state law," the lawsuit states.
Golden has denied the charges, and the case remains pending.