Grand Rivers takes on PNB for damages

SOUTHERN ILLINOIS – It could very well be one of the biggest civil suits ever to grace the federal courthouse in Benton…and it’s not just a “brewing feud that’s gone public.”

The situation between Peoples National Bank and Grand Rivers Community Bank is, effectively, a solid set of documents that prove what many have been making allegations about for approximately two years: That Frank William Bonan II, known locally as “Lil Bill” Bonan, has gone off-the-chain uncontrollable, to the detriment of everything for which his family has worked hard for decades.

The lawsuit that was filed on March 14 by Grand Rivers Community Bank (GRCB) against Peoples National Bank (PNB), its holding company Market Street Bancshares, its operators Frank William Bonan, Lil Bill Bonan and Carmi CPA Keith Botsch is merely a next step in the continuation of critical issues facing GRCB. Given what has been confirmed by banking authorities has been occurring at GRCB for the past several years, the bank had little choice but to file in the federal civil venue to attempt to recover their losses.

However, what the step is after the civil suit filing has yet to be seen.

And the same banking authorities have openly said that “next” could include criminal charges, which, at the level the players are, will be federal – and therefore very serious – as well.

A much bigger situation than ‘brewing feud’

Characterizing the case as a “brewing feud,” therefore, is watering it down considerably.

The short version, according to an analysis of the documents by those in the banking industry assisting Disclosure with the case, is that GRCB, being a “troubled bank” dating back to 2010 and operating under a cease and desist order as to several banking infractions, needed to get out of “trouble.” The solution to this was for someone or another entity to come in and purchase stock. That someone was Lil Bill Bonan.

“At the time,” said a source, “it appears they were going to make Grand Rivers the next Peoples.

“Instead, it appears Bonan may have been using GRCB as a cash flow for him that he didn’t think would be found out.”

Utilizing his control of other companies owned either by himself exclusively, in conjunction with others, or by people with whom he was directly affiliated, Bonan, it’s alleged in court documents, secured loans that either went to his pet projects, or were made to non-existent people (the term “straw man” is used throughout the document, that term in the context

BILL BONAN JR.

referring to a person set up to serve as a cover for a usually-questionable transaction. Under the circumstance, however, it appears that there was more than just a “cover” issue for Bonan’s alleged straw men, to which he was ensuring loans were going; most of the time, in banking and other finance matters, a “straw man” is a real individual, under whose name property might be filed as ownership in order to cover over who actually owns the property. It appears, at least according to this filing, that there were loans made to people who didn’t exist AT ALL…something that is highly illegal.)

The straw man issue, while repeated throughout many of the claims, isn’t the only highly questionable action or set of actions taken as alleged by GRCB.

The bottom line is something that will become abundantly clear once the 61-page document is examined:

That if anyone else were to have allegedly committed even half the actions conducted over the past two years as claimed in the filing, that person would already be in jail.

What is RICO?

The complaint alleged under federal civil law – RICO – bears out that premise.

RICO is the Racketeer Influenced and Corrupt Organizations Act, a federal law enacted in 1970 in an effort to allow victims of organized crime to sue those responsible for said crime, were they to be found guilty, for punitive (punishment) damages.

RICO is most frequently associated with ‘mob’ crimes – those carried out by organized crime groups, like the various mafia organizations which utilize extortion and other criminal methods to exert control over people and entities.

Interestingly, over the course of the past couple of years, Lil Bill has, according to his friends and co-workers, managed to get himself a “Sicilian” (location of origin for the “Mafia”) tattoo, about which he had been bragging ceaselessly when the incidents outlined in the lawsuit were taking place.

GRCB indicates RICO immediately in the filing, at the introduction of the complaint for damages and declaratory relief.

In the very first paragraph, GRCB states they are seeking the damages for “state law claims of financial institution fraud, fraudulent misrepresentation, breach of fiduciary duty, and fraud.”

They claim RICO on the part of the individual actors, as well.

The various actors/entities

Those actors are outlined in the next 15 paragraphs of the suit, in which it’s explained what GRCB and PNB actually are, and who controls them.

It’s important to note that the entities that regulate each bank are different. The Federal Deposit Insurance Corporation (FDIC) supervises GRCB because GRCB is a state-chartered bank. The Office of the Comptroller of the Currency supervises PNB because Peoples is a national bank. GRCB’s holding company (collective of shareholders operating as a corporation) is Main Street Bancshares, Inc., headquartered in Harrisburg. PNB’s holding company is Market Street Bancshares, Inc., with principal offices located in Mt. Vernon, Ill., but so named because the Bonans originated the business on Market Street in McLeansboro.

Throughout the document, the elder Frank William Bonan is referred to as “Bonan I,” and his son, “Bonan II.” Bonan I is chairman, president and general counsel of People and is the vice chairman of Market Street; Bonan II is the former chairman of Main Street and Grand Rivers and is a current director of Market Street and Peoples. He also formerly served as Peoples’ president of the Southern Illinois District.

Those other companies…

Bonan II, it’s noted, also has ownership interests in other companies that are mentioned throughout the document in excruciatingly-vague terms.

Within the first few paragraphs of the suit, it’s cited that Bonan II has ownership interests in “Company #2 and Company #3. Prior to their dissolution, Bonan II had ownership interests in Company #1 and Company #5,” the “companies” not disclosed by name at this point and left up to guessing as to their names throughout.

Grady Gaskins and his former bride, Taylor Wilson, daughter of Harrisburg attorney and CPA Robert Wilson, in better times.

Sources close to the case have speculated what company is what, however, and throughout this article, references to that speculation will be made. Interestingly, it’s been confirmed through multiple sources that Bonan II has control of or interest in a vast number of companies, most of them having been named after the family pets – Lily, Sonny, Heidi, Saylor and Max being among such names.

In fact, it’s been clarified among sources that Bonan’s “Nikki’s Place” businesses, the gambling joints across southern Illinois, were not named after Bonan’s wife Nicole (with whom he’s going through a divorce, and which is not yet finalized, this in Franklin County), but were named for a female dog someone in the family had, whose name was “Nikki.” While employees of the various outlets have stated Bonan is openly declaring he’s divested himself of ownership in the business, it is referenced throughout the federal civil filing as something he does indeed have control over…and which may have benefited from what went on between GRCB and PNB.

Company #2 is listed as an Illinois LLC with principal offices in McLeansboro, which Bonan II manages.

Company #3 is listed as an LLC with its principal office in Benton; Bonan II and a Peoples insider are managers.

Company #4 is an LLC with its principal office in McLeansboro; Bonan II and a “Peoples insider” (not mentioned by name, but sources indicate it’s likely Katherine, Bonan II’s sister).

Company #5, the documents show, was an LLC with principal offices in Benton prior to its involuntary dissolution December 9, 2016. Bonan II was the registered agent for Company 5 and also served as the manager, along with Jason Harbison, Grady Gaskins, Brandy Questelle and DeeDee O’Bright.

All five companies are collectively referred to in the lawsuit at “Bonan II-controlled entities.”

The power players

Sources have speculated that “Company #1” could refer to WABB LLC, the limited liability company formed to operate Nikki’s Place. The suit says that Company 1 “was” an LLC with principal offices in Carmi, prior to its voluntary dissolution on May 31, 2016, and that Bonan II and Botsch were the managers. However, the Illinois Secretary of State has WABB as ‘active.’

Whatever the case may be as to Company 1, it’s important to note at this juncture that WABB is so named, not after a dog, but after those involved with the corp itself: Stan Williams, of Port Orange, Fla., Stacy Austin, of Mt. Vernon, Ind., Bonan II, and Keith Botsch.

Williams is owner of J&J Ventures of Carmi, formerly Williams Enterprises, the place where the “coin operated amusements” like video gambling, formerly against the law in Illinois and only in recent years legalized to the point that many establishments like Nikki’s Place, Lucy’s Place, and pretty much every little corner store that can find a sequestered spot for them, are making serious bank from Illinois’ versions of slot machines.

This crew involved in WABB has, for years, believed themselves to be very “influential” in the area, ‘power players’ in business. Their affiliation with other influential people in downstate Illinois is well-documented, and includes close connections with judges and other public officials, as well as elected representatives, some of which are mentioned in the lawsuit.

Others sued as individuals, or mentioned as players

Botsch, who has long been seen as a disagreeable pseudo-public official with his fingers in a lot of pies in southern Illinois as a publicly-supported accountant (for public bodies, to do their audits), is described in the documents as a former member of Grand Rivers’ Executive Committee and who performs accounting work for GRCB.

He is also noted as being a current director of Market Street and Peoples; and it’s stated that he served as President of GRCB from August 2010, upon approval of the change in control, through October 2015. He is also a principal shareholder of Main Street.

Joseph Hunt Bonan (referred to in the suit as “H. Bonan”) is listed as a resident of Mt. Vernon, Ill., and is chairman and president of Market Street and VP of Peoples. He is also Bonan II’s uncle.

Grady Gaskins is listed as merely an “individual resident of Harrisburg.” He began serving as Chief Financial Officer (CFO) of Grand Rivers on April 16, 2015, and purported to act as a director beginning October 19, 2015. He was also a lender for GRCB. Prior to his employment at GRCB, he served as loan officer at PNB. He also concurrently acted in a management capacity with Company 2.

Gaskins has the notoriety of having been married into a Harrisburg “power family” (at least, in the patriarch’s mind) of Robert Wilson, former mayor, former city attorney, and currently an attorney and CPA who himself has his fingers in a lot of pies.

This particular pie, however, is one that he’s begged off of: Despite the fact that Bonan II’s vehicle was seen at Wilson’s office throughout the summer of 2016 – many times, days in a row, and early in the mornings, too – Wilson distanced himself from Lil Bill last year, and Wilson’s daughter, Jessica Taylor, distanced herself from Gaskins, whom she married in 2013 and with whom she has a child. Their divorce was final in November of 2016.

Gaskins even has the singular ignominy of Taylor filing in February to have her name formally changed back to Wilson from Gaskins…thus eliminating as much of Grady from her life as she could.

Alleges violation of the law

GRCB claims that since 2010, Peoples, Market Street, Bonans I and II and Botsch have asserted control over and indirect ownership of GRCB and Main Street without approval of the Board of Governors of the Federal Reserve System.

This, they state correctly, is in violation of laws and bank regulations, something that mainstream media, when covering this issue, is carefully overlooking and is not mentioning in any way.

At this point in the suit GRCB claims that the PNB players “have operated Grand Rivers to its detriment for the primary benefit of Peoples and is individual insiders.”

The leadership control of Main Street and GRCB by Market Street and PNB began in 2010 when two insiders of Peoples – Bonan II and Botsch – first constituted a majority of GRCB’s three-member executive committee, the suit states.

Documents Disclosure obtained from the FDIC show that that was the point in time when GRCB had its first run-in with bank regulators and was deemed a “troubled bank.” The stepping in of the Bonans and potential for GRCB to merge with the highly-successful bank, therefore, was very welcome.

However, being that magnanimous, the lawsuit shows, isn’t what Bonan II and Botsch had in mind.

The executive committee is responsible for approving all loans made by GRCB, the documents show; and many of the loans made while Bonan II and Botsch were controlling member of that committee benefited Market Street, PNB, their insiders, Bonan II’s family members and friends, or the Bonan II-controlled entities.

Making matters worse, the docs show, “Bonan II and Botsch did not disclose the substandard nature of certain loan transactions to Main Street, Grand Rivers, or the sole independent member of the GRCB executive committee.”

And when questions were raised as to the “quality” of these bad loans, “Bonan II exercised dominant control to further the scheme.”

Without approval of the Fed

The documents in the lawsuit made specific note of Market Street/ PNB having asserted this control and direct ownership “without the approval of the Federal Reserve,” something that must be obtained under the circumstances.

GRCB stated in the lawsuit that PNB “violated Section 3 of the Bank Holding Company Act” by acquiring such control. Through the combined ownership interests of Bonan II and Botsch, who together had power to vote more than 25 percent of the voting securities in Main Street, the two had “controlling influence over the management or policies of the bank.”

Additionally, it’s pointed out in the lawsuit, Market Street and PNB indirectly own at least 35.14 percent of outstanding shares of Main Street stock; members of the Bonan family collectively own more than 25 percent of Market Street stock and more than 10 percent of Main Street stock; Botsch owns Market Street stock and is the largest shareholder of Main Street; and Bonan II “inappropriately controlled the election of the majority of directors of Main Street.”

The October 2015 moves

A major player is next mentioned in the documents, when it’s stated that on October 21, 2015, Bonan II communicated to Whitney Stringer, Chief Executive Officer of Grand Rivers via telephone a directive that the following occur within Grand Rivers: everyone except one individual, Jake Campbell, resigns from the board; Bonan II is then able to choose his own board of directors; Whitney Stringer becomes CEO of Grand Rivers; Grady Gaskins becomes CFO of Grand Rivers; and Bonan II receives $10,000 a month as board chairman.

The same day, Bonan II followed up with emails to Stringer, listing the five individuals whom he demanded compose the Main Street and Grand Rivers’ board: Himself, Stringer, Gaskins, Campbell, and Luke Phelps.

Stringer did so, and the demands were carried out, with the existing board at the time resigning.

However, all of this was in violation of Illinois law, as well as Grand Rivers bylaws (which they must establish and abide by according to Illinois law), as Bonan II was neither elected nor appointed to the board.

Further, this meant that GRCB was operating without a duly-elected board that was not empowered to act on behalf of the bank…and pursuant to the bylaws, it was then impossible to have a quorum of directors, given that only Campbell and Stringer actually represented GRCB.

Stringer, it might be noted at this juncture, is wife of Doug Stringer, a guy from the McLeansboro area who likes to dabble in race cars and with whom Bonan II has some kind of unexplored relationship. Stringer is one of a handful of ‘influential’ people in McLeansboro who has some kind of connection with the state of Pennsylvania…same as the former doctor who at one time worked at the hospital in McLeansboro, Brian Burns.

Burns came to the area from Pennsylvania. He is now sitting behind bars in Saline County Detention Center, charged with the murder of his wife, Carla.

Straw borrowers…to pay back TARP??

Documents in the civil suit show that on June 29, 2012, PNB/Bonans engaged in what is being termed an “illegal transfer of capital from Grand Rivers to Market Street through the use of straw borrowers.”

Three loans were extended to “family members of a shareholder, director, and insider of Peoples,” paperwork states, noting that each loan was for $490,000, which bank sources tell Disclosure is just under the limit GRCB could loan in a single transaction at any time, $500,000.

“All three borrowers were in their twenties at the time the loans were extended,” paperwork notes, “and none were customers of Grand Rivers.”

The names of the individuals were not listed in documents. Bank sources have speculated that the “borrowers” were either some young Hamilton County people who allowed Bonan to “use” them as straw men, or that they weren’t real at all, and the dates of birth were there merely to make the transactions look real.

Whatever the case, Bonan II moved for approval of the loans, and Botsch seconded it.

Each loan was secured by 1,841 shares of Market Street common stock, pledged by the unnamed Peoples insider.

However, these shares, while real, weren’t really pledged, thus consisting of “non-existent collateral,” according to documents. The shares were pledged as collateral anywhere from several days to more than a month later than the loan date, making the loans illegal.

“Money was siphoned from Grand Rivers to increase the capital of Market Street,” documents state. “The loan proceeds totaling $1,470,000 were paid via wire transfer on July 5, 2012. Upon information and belief, on August 9, 2012, Market Street and Peoples used these illegally-obtained funds to repay money owed to the federal government under the Troubled Asset Relief Program (TARP).”

This marks the end of the first presentation of the massive lawsuit PNB is facing through allegations as made by Grand Rivers. The next edition will feature more on the substandard loans Bonan allegedly ordered made through GRCB as “participation loans,” money he obtained for his “projects” including possibly the Chess Club in Harrisburg, and how the whole thing imploded a little over a year ago. Next issue is on stands April 26.