MT. VERNON – A former Vice President of Community First Bank of the Heartland (CFB) has been arrested as well as indicted on 11 federal charges and will be prosecuted in the Southern District of Illinois courts in Benton. A warrant for the arrest of Richard B. Pigg was issued on Feb. 25 and he was taken into custody March 4 on four arson charges, six bank fraud charges, as well as one mail fraud charge.
Pigg formerly worked as a loan officer from May 10, 2011 until Dec. 30, 2016 to devise a scheme that would defraud CFB by obtaining more than $600,000 to purchase investment properties and pay his credit card bills as well as those of his ex-wife. The indictment against Pigg states that he also used the money to pay his real estate taxes and those of RDAC Rentals, INC. and Boardwalk Properties, LLC, a rental business that he owned or managed. The scheme included Pigg asking several bank customers to purchase real property in their name to be used as rental properties on his behalf through mortgage loans financed at CFB. These customers agreed to sign mortgage loans that Pigg would allegedly then say he had a property manager to bring in renters, collect rent money, and maintain the property. Pigg also said he would provide insurance and take care of the real estate taxes. However, he then allegedly originated and approved loan paperwork for the rentals through his position at the bank all the while, without disclosing the true nature of his relationship with the bank customers or ownership interest in the properties to CFB.
The indictment also says Pigg arranged for customers to buy property in Murphysboro, West Frankfort, Centralia, and Mt. Vernon using this fraudulent scheme. He would then increase the financed amount of money on these loans by thousands of dollars to show excess loan proceeds or cash made payable to the customers without their knowledge or permission. Pigg would then keep the cashier’s check and deposit it into CFB accounts as well as his own personal account at People’s National Bank that he held with his mother. He would then withdraw funds and acquire loan disbursement. The ultimate object of the scheme and the cause for the arson charges was that Pigg would then allegedly have fires set to destroy the mortgaged property so that he could collect the insurance money.
Pigg was arrested in Texas where he now resides outside of Dallas. He had his first appearance in court in the Northern District of Texas and plead not guilty to all charges. He was released on bond pending his trial and is not currently in custody. Pigg’s final pre-trial hearing is set for April 27 in Benton Federal Court with a jury trial set for May 10.