Colonial Bank Fraud Investigation Continues. Will Bobby Lowder Be Indicted?

Bobby Lowder, former CEO of Colonial Bank

The criminal investigation into the collapse of Colonial Bank continues, according to federal investigators.  Colonial Bank spectacularly crashed and burned in August of 2009.  It was the largest bank failure that year, and the largest ever of an Alabama-based bank.  Actually it was the 6th largest bank ever to fail in the United States, costing the FDIC’s Deposit Insurance Fund an estimated $2.8 billion.  The FDIC sold the remaining assets of Colonial to the strong North Carolina-based BB&T.

The fraud investigation seems to be centered on Colonial’s Florida mortgage operation.  Last month, two officers of that mortgage division pled guilty to criminal shenanigans.  Further, they have agreed to testify for the government in the April trial of the mortgage division’s president.

The much discussed question in Alabama is whether former Colonial CEO Bobby Lowder will be indicted.  Some say his legal exposure comes from signing off on the public filings of the Florida mortgage operation.  The filings were bogus, but it has not been proven that Lowder had knowledge of that.

Lowder’s reputation as a micro manager makes some believe that he must have known what was going on in the rotten Florida operation.  But again, it’s only speculation at this point.

However, Lowder does continue on the Board of Trustees at Auburn University, albeit with diminished influence.  He no longer has a bank with which to make huge loans to other members of the Board of Trustees.

But he does serve as chairman of the finance committee of the board.  Kind of ironic, isn’t it, that the guy who ran a large bank into the ground now presides over the finances of one of the state’s major universities.

William Bruce is an Accredited Business Intermediary and 
Appraiser serving business buyers and sellers in the Southeast.

About William Bruce

President, American Business Brokers Association / Business Broker and Accredited Business Intermediary assisting business buyers and sellers with the transfer of ownership since 1986 / Author: How to Buy a Business.
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4 Responses to Colonial Bank Fraud Investigation Continues. Will Bobby Lowder Be Indicted?

  1. John Gittings says:

    While I personally lost money on Colonial and I am assured that Mr. Lowder and all directors did as well, I am not absolutely sure of one’s innocence or guilt on heresay. Employees lost retirement as well as jobs, and investors also lost. My bet was that the State Banking Department would have not approved them if they suspected any problems. Itwould seem to me that it would be easy to conceal the fraud from Colonial since I doubt Mr. Lowder or any others went out to view the properties and even if they did how would they know? For them to know someone would have had to say we are borrowing money from you but the paper we are pledging is bogus, think about it. If that is true then we do not need to be having this dialogue.

  2. Mr. Gittings, are you the John Gittings who with a former Colonial Bank officer formed the Keystone Bank in Auburn?

  3. This is a list of the member of the trustees selection committee with contact information.

    If you have strong feelings, as many of us do, against the reappointment of Bobby Lowder, please write, email and call each member of the selection committee to express your opinion. The more contacts, the better.

    John G. Blackwell
    P.O. Box 19065
    Huntsville, AL 35804
    (256) 874-3991

    Raymond J. Harbert
    2100 3rd Avenue North, Suite 600
    Birmingham, AL 35203
    Phone: (205) 987-5605
    Fax: (205) 327-6885

    Bobby Poundstone
    401 Adams Avenue, Suite 780
    Montgomery, AL 36104
    P: 334.956.7645
    F: 334.956.7845
    bpoundstone@babc.com

    Mr. Howard B. Nelson ’69
    2024 Magnolia Ridge
    Birmingham, AL 35243
    205-967-3274
    hnelson@colonialprop.com

    Nancy Young Fortner ’71
    2632 Calumet Dr.
    Brownsboro, AL 35741
    256-533-5681
    nancyfortner@auburnalum.org

    Governor Robert Bentley
    President of Board
    State Capitol
    600 Dexter Avenue
    Montgomery, Alabama 36130
    (334) 242-7100

  4. Mr. Justice says:

    Bobby Lowder is a scumbag.

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