Nov. 6, 2007 — An FDIC investigation was recently triggered when $4 million worth of checks were presented to and cleared by the V.I. Community Bank (VICB). The bank is solely owned by Jeffrey Prosser, former CEO of Innovative Telephone, who is in Chapter 7 bankruptcy.
When contacted last week, John McDonald, V.I. Banking Board director, said the community need not be concerned because the bank is solvent.
McDonald explained Tuesday that the checks were written by subsidiaries of Innovative Communications Corp. to cover various operating expenses. Prosser was removed as chief executive officer of ICC in September.
"The FDIC has been in and out of VICB over the years, because it's a new bank," McDonald explained. "In fact, they went in there in June, looked it over and didn't see anything wrong, so they gave them a good report. The FDIC subsequently became aware that the checks had been paid, and the amount of the checks were just so big that they needed to take a look at it."
McDonald added that the bank is still operating normally and is considered to be "very liquid," though it is having "an issue with capital."
"We have already made contact with the Attorney General's office to see what we need to do," he said. "We are also working with the FDIC and the federal trustee on the matter."
McDonald's statements were echoed Tuesday by James Carroll, the recently appointed bankruptcy trustee in Prosser's bankruptcy. When asked about why the checks triggered the FDIC investigation, Carroll said, "It was a question of insufficient funds in some of these cases. But I plan to immediately seek restitution from some of these companies on behalf of the bank."
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