The former head of the bank is accused of breaching the rules of the borrower and spending a lot of money.
The Federal Reserve Board he says Former Bank of Eufaula CEO Thomas Engelbrecht spent more than $3.5 million by funneling millions to his close relative’s struggling business.
Between 2020 and 2023, the Fed says Engelbrecht repeatedly approved large returns for the business of his close relative, even though the account had already been cleared of large sums and violations of banking regulations.
The business was never able to pay off its debts or pay back its debts.
The Federal Reserve’s COVID-19-era Main Street Lending Program, which supported small businesses, lost $1.88 million in its funding portion.
Engelbrecht also loaned his close relative’s business nearly $200,000, fueling the interest rate dispute.
According to the Federal Reserve, Engelbrecht was very interested in his close relative’s business even though it was facing “financial problems,” which put the Bank of Eufaula at great risk.
“…Engelbrecht’s conduct was a breach of law or regulation, a breach of fiduciary duty, or unsafe banking practices, and involved his dishonesty or demonstrated willful or continuing disregard for the safety and health of the Bank…”
The Federal Reserve bans Engelbrecht from the US banking industry while paying him $125,000.
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