Federal case against Bell confusing for all sides

The case involving former Shelbyville banker Ron Bell turned out to be a confusing one, both for investigators and the federal judge who passed sentence in the case on Monday.

Bell pleaded guilty last October to charges of making a false entry in bank records while he was employed at Regions Bank, waiving indictment and arraignment.

After a lengthy and complicated hearing in U.S. District Court in Chattanooga, Judge Harry S. Mattice Jr. told Bell before passing sentence that being a convicted federal felon was punishment enough of the former banker.

Mattice sentenced Bell to one day in jail, which he had already served, plus three years probation. Bell will also not be allowed to work in the banking industry again.

How it began

For Detective Brian Farris of the Bedford County Sheriff's Department, the investigation began two years ago after information, including bank documents, was passed to him about allegations of forgeries at Regions Bank.

Eventually, the investigation led to loan officer Ron Bell at Regions, and it was revealed during Bell's sentencing hearing in Chattanooga on Monday that Bell lied to a federal grand jury about the forgery.

Farris said that based on the transcripts of his testimony, Bell initially denied knowledge of the forgery, but later came back and admitted that he directed a female bank employee to sign Charlie Coffey's name to an extension on a $3 million loan.

The 76-year-old Coffey is a well known citizen of Bedford County. He was once an assistant college football coach at Tennessee and Arkansas and also head coach at Virginia Tech. Coffey later went into the trucking business and made his fortune there.

On the witness stand in Chattanooga on Monday, Coffey testified that he had done business with Bell for 30 years and trusted him, also attending the same church with the banker.

Ponzi victim

But Coffey also testified that he was an investor with Robert McLean and that the loan at Regions was taken out using collateral from that investment account.

Coffey would later learn, as others did, that he had made a bad investment.

McLean, who was accused of running a Ponzi scheme, took his own life in September 2007 in Shelbyville after lawsuits seeking over $50 million were filed against him by investors.

According to court filings, McLean misappropriated more than $40 million in investor funds during the last few years of his life.

McLean and an associate, Mark S. Riddle of Rutherford County, allegedly promised investors guaranteed rates of return and periodic payments of interest and principal, but those payments stopped in April of 2007.

Coffey told Judge Mattice that he already had money and didn't have to borrow from Regions, testifying that Bell told him that "everything was worked out" and to trust him.

Farris explained that sometime during the merger with AmSouth Bank and Regions, the forgery took place.

According to federal document filed in the case, Bell, the loan officer for Regions Bank in Shelbyville, made the $3 million dollar loan to Coffey on May 15, 2005.

On or about June 2, 2006, the loan was up for renewal and according to federal documents, "Knowing he did not have Coffey's permission, the defendant (Bell) directed a subordinate to prepare a loan extension agreement and directed her to sign Coffey's name."

Coffey also testified on Monday that he signed two later extensions on the loan after the incident about the forgery.

Farris repeatedly stressed this week that the McLean Ponzi scheme was never the focus of his investigation into Bell, only the fraud committed by Bell at Regions Bank. The detective explained that the McLean matter was being handled by federal prosecutors representing the Middle District of Tennessee. Bedford County is covered by the state's Eastern District in federal court.

"The why's and what for's, I don't know," Farris said of the McLean matter. "I don't know what was going on internally (at Regions) that created the situation, and the Ponzi scheme was never a focus of our investigation. This (the forgery) was some of the fallout from it."

However, Coffey told Judge Mattice that as a result of the forgery, he was charged $138,414.96 in interest by Regions and has spent $85,000 in legal fees as well as arbitration fees totalling $33,000.

Coffey is still in a civil lawsuit against Regions over the loan and the suit is being handled by a federal arbitrator. As a result, Coffey said he was unable to comment about the case to the T-G.

The judge also advised Coffey at one point in his testimony not to say anything further, because it could impact his ongoing suit with Regions Bank.

Confusing case

Mattice said Monday that the kind of charge Bell faced was not one usually brought by federal prosecutors, and asked U.S. Attorney Gary Humble "what's cooking here?" in regards to the case.

Humble told the federal judge that investigators had never determined exactly what was going on at the bank with the loan, but he did accuse Bell of trying to cover up an earlier fraud and could have charged him with lying to the federal grand jury.

Mattice had earlier called the matter a "highly unusual fraud case" and "hard to understand," telling Humble he was not going to speculate what the effect of the fraudulent signature on the loan was.