INDICTMENTS TARGET FRAUD, CONSPIRACY AT FIRST EXCHANGE BANK (5 YEARS AGO)

Feb. 28, 1993

Reprinted from the Southeast Missourian

A former Cape Girardeau bank official and his wife, also a local bank officer, were found dead Friday in California at nearly the same time they were indicted on bank fraud charges, the FBI said.

Agent John Gulley, FBI spokesman in St. Louis, said Don and Patricia Chilton were found shot to death with a .38-caliber pistol in the garage of a rented house at the Palm Desert Country Club, an upscale resort near Palm Springs, Calif.

Gulley said the deaths appeared to be a "mutual suicide."

Chilton, 45, was former chairman of the First Exchange Corp. in Cape Girardeau and former chairman of Jackson Exchange Bank. He was indicted on 26 bank fraud counts and one count of conspiracy.

Patricia Chilton, 37, was former corporate vice president and vice president of the Jackson bank. She was indicted on three counts of bank fraud and one count of conspiracy.

Bill Chilton, 47, Don Chilton's brother, was indicted on 27 counts of bank fraud and one count of conspiracy. He was former advisory director of the corporation and the First Exchange Bank of St. Louis, another subsidiary.

Also indicted was Arkansas bond salesman Andrew J. Crawford.

First Exchange, based in Cape Girardeau, collapsed in May in what was considered at the time to be the biggest bank failure in Missouri's history.

Sheriff's deputies found the bodies at 3 p.m. St. Louis time. At virtually the same moment, the U.S. attorney's office in St. Louis announced the indictment of the Chiltons on charges of cheating First Exchange Bank out of more than $15 million.

According to the indictment, the four defrauded the now-defunct First Exchange Corp. and its five subsidiary banks by giving false information to get approval for more than $15 million in loans for family members and their private businesses.

The sour loans forced the banks to shut down, Assistant U.S. Attorney Mitch Stevens said.

The bank failure stunned the Cape Girardeau area as hundreds of local investors lost millions of dollars.

One of the investors, Dr. Charles McGinty of Cape Girardeau, now heads the board of directors of what's left of First Exchange's assets.

He said he has figured his personal loss including bank stock, debentures and capital donations he made after federal regulators targeted First Exchange - to total about $1.7 million.

"That's why my home has a `For Sale' sign on the front lawn," McGinty said. "But I'm not the biggest loser, either."

McGinty, 68, has lived in Cape Girardeau for nearly 60 years. He said a total of 463 stockholders lost about $40 million in Cape Girardeau County alone from the bank failure.

But he said the actual cost to the county and its residents will be much higher. McGinty said that if the bank stock is placed at its highest value, combined with debentures, the cost to the Federal Deposit Insurance Corp. to protect depositors, and First Exchange's debt to an out-of-state bank, the cost will be about $100 million.

"The loss to the people of Cape Girardeau County is tremendous," he said.

McGinty said local investors and bank officials were kept in the dark as to the indictments until they were handed down Friday. He said 10 directors from the Cape Girardeau and Jackson banks testified before the grand jury last week.

The physician said it's unclear whether additional indictments will be sought.

"They have hinted that there might be additional indictments," he said. "But, as you know, this grand jury just meets for 18 months, so there would have to be another grand jury, and the testimony re-presented.

"But it's been implied that there could be another indictment or two."

The four indictments Friday did little to assuage McGinty's frustration over the loss he suffered through the bank failure.

"What I told the FBI is, `I don't want vindication, I want my money back,'" he said. "There are people who lost more than $1 million as individuals, and there's no way to get it back."

Still, McGinty said he and other officers and directors of the bank were "relieved" to hear of the indictments.

The indictment alleges that the Chiltons and Crawford used the assets of the bank holding company and its five subsidiary banks for their own financial gain and the benefit of family members and friends.