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Ex-Officers of Big Bear Bank Arrested in Tax Fraud Case

August 20, 2003|Kathy M. Kristof | Times Staff Writer

Four former officers of First Mountain Bank in Big Bear were arrested late Monday and Tuesday morning on charges of conspiring to defraud the government and consumers through a series of financial scams.

An indictment unsealed late Tuesday named Dennis Shollenburg, the 57-year-old former president and chief executive of the bank; Hazel Hagy, former executive vice president and chief financial officer; Brenda Knudson, former assistant vice president and business development officer; and Vicky Melton, former senior vice president.

The four were indicted by a federal grand jury in Los Angeles in late July. Also named in the indictment was Thomas Miller of Gainesville, Texas.

The indictment alleges that Miller and Shollenburg sold anti-tax books and literature through a business called the Freedom Education Center in Big Bear. Miller also allegedly traveled the country helping people create bogus trusts that he claimed would allow them to shield money from income taxes.

The defendants allegedly used the bank to house the bogus accounts. They shielded the owners' identities by using trust identification numbers rather than names, the indictment said.

Miller and Shollenburg also were charged in connection with a separate investment scheme that allegedly involved selling supposedly high-yield bank debentures to investors. The pair promised "guaranteed" returns of up to 120% within 90 days, but none of the money was invested, according to the indictment.

All five suspects were in custody and were unavailable for comment Tuesday.

First Mountain Bank, in a statement, said the alleged conduct covered by the indictments was "committed beyond the scope of [the individuals'] employment and in derogation of their duties as bank officers."

Bank President Dave Perry would not comment on when the former officers had left the bank. However, the company's statement said that all four had been barred from participating in the management of a bank per a court order issued March 11.

That order was the result of an investigation by the Federal Deposit Insurance Corp. that determined the former officers were causing the bank to engage in tax code violations.

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