The former employers of a bank CEO in the US state of Minnesota have accused their former employee of using letters of credit (L/Cs) to secure personal loans for himself.

Voyager Bank Financial Services (VBFS), the holding company of Voyager Bank, allege that the bank's long-time CEO, Tim Owens, also embezzled loans from his employer.

Accusations

Owens obtained US$15 million in personal loans from Voyager Bank and its holding company, according to allegations made by VBFS.

The holding company was apparently prompted to make the allegations after Owens filed a suit accusing the bank, VBFS and others of several misdemeanours, including wrongful termination, breach of fiduciary duty and defamation.

L/C abuse

According to the suit filed against Owens, he used L/Cs issued by Voyager Bank to raise loans from two other banks.

Owens allegedly did not repay the loans of US$7.5 million from Alliance Bank and U$2.2 million from Tradition Capital Bank.

Open dispute

This meant that Voyager Bank finished up paying off the U$9.7 million Owens allegedly owed those banks.

Owens was dismissed in August but, according to local media reports, the dispute between the Voyager group and its former employee has up until this month been dealt with mainly behind closed doors.

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