Two former Damariscotta Bank and Trust employees, including former Vice President Roger Smith, face theft charges in connection with alleged fraud and extortion during their tenure at the bank.
Smith, 45, of Gardiner, faces a charge of Theft by Extortion. Denise Benner, 36, of New Harbor, faces a charge of Theft by Unauthorized Taking or Transfer. Both are Class C crimes, which carry a penalty of up to five years incarceration and a $5000 fine.
According to a Suspicious Activity Information Explanation/Description (SAR) from the bank, a bank customer alleged that Smith took out eight loans in his name for a total of $23,053.25.
Smith formerly asked the customer for personal cash loans, but eventually, the customer declined to continue the loans, according to the SAR.
According to a typed statement from the customer, Smith quickly devised a plan for the customer to take out loans and give the money to Smith. Eventually, the customer wrote, “Roger [Smith] wasn’t even asking anymore, he just basically told me what he was doing. This became a regular thing over the next year and a half.”
During one meeting, Smith allegedly offered the customer a 30 mg oxycodone pill, a prescription pain medication and potent narcotic. The customer, a former drug user who “had been clean for quite some time,” declined the gift, he wrote.
The customer’s relationship with Smith began in 2001 when the customer, in need of a loan to fix the brakes on his truck, approached Smith on the recommendation of a friend. “I didn’t have the best credit… but Roger said he believed in giving people chances,” the customer wrote.
Over time, the customer’s relationship with the bank grew stronger, as he and his wife opened joint personal savings and checking accounts, a business checking account for the customer’s construction business, and faithfully paid back multiple loans.
The customer’s relationship with Smith also grew. “I developed what I thought was at the very least a small friendship and through many business and personal conversations a certain amount of trust,” the customer wrote.
When the relationship transformed, the customer, afraid to deny Smith’s persistent requests for loans, took action.
“I knew that Roger could burn me if he wanted because nobody would believe my word over his, which is why during one of our meetings in his office when he loaned money to himself in my name I took a tape recorder and recorded part of our conversation so I had some solid evidence in case he tried to burn me,” the customer wrote.
According to the customer’s statement, Smith intimidated the customer with references to “things… he was able to get done” and vague, “out of state” connections to “bullies” or “dealers.”
Damariscotta Police Chief Steve Drake arrested Smith on Aug. 23. Smith was released on $5000 unsecured bail.
Benner, another long-term bank employee, allegedly withdrew money from the savings accounts of her brother and her 7-year-old niece and, with Smith’s help, took out a $4000 loan in her brother’s name while in the employ of Damariscotta Bank and Trust.
Damariscotta Bank and Trust terminated Benner and Smith’s employment on May 13, the day after Benner’s brother met with bank officials to discuss the loan.
According to the bank’s SAR, Benner admitted to “fabricating loan documents applying for a commercial loan, [forging] her brother’s signature to various loan documents, including a promissory note, and [taking] the loan proceeds for her own benefit” in a meeting with bank officials.
According to Drake’s affidavit, Benner repeatedly denied the admission to Drake.
According to another SAR regarding Smith’s involvement, “Roger Smith didn’t deny or confirm his involvement in the Denise Benner document forging.”
The report continued, however, to outline the bank’s general dissatisfaction with Smith. “This incidence, was another of numerous situations, of poor performance in underwriting standards and documentation as well as poor service to loan customers. The implied involvement in assisting in the forging of loan documents and benefiting in the proceeds deviates from the oath taken as a bank officer.”
According to both reports, Benner “stated that the original idea came from loan officer Roger Smith and that he had shared in the benefit of the fraudulent loan proceeds.”
Benner provided a conflicting account of Smith’s involvement to Drake. According to the affidavit, Benner “told [Drake] that Roger Smith was not involved in this he was fired because he approved the loan paperwork without [Benner’s brother] present.”
Instead, according to the affidavit, Benner told Drake that she “asked [Benner’s brother] for a loan because she went from a two paycheck house hold [sic] to just her paycheck and had to take care of the children.”
On July 13, Benner was fired from another job as a caretaker for a Bristol woman.
The Damariscotta Police Department began investigating both employees in mid-May and arrested Benner on July 15. According to Lincoln County Superior Court documents, Benner was released on personal recognizance later that day. According to the arrest warrant, Benner’s bail conditions include “no contact or entry to Damariscotta Bank & Trust, or employees, no contact with Roger Smith.”
According to a written statement from the mother of Benner’s niece, Benner’s brother found out about the fraudulent loan in October 2009. Shortly thereafter, the woman discovered funds missing from her daughter’s savings account.
According to the woman’s statement, Benner transferred money from her niece’s savings account to Benner’s account by phone transaction, claiming to do so on her brother’s behalf. After the discovery, the niece’s mother put a flag, or alert, on her daughter’s account.
“Some time later, Denise [Benner] called [Benner’s brother] mad, saying she could have lost her job,” she wrote.
Scott Conant, the President and Chief Executive Officer (CEO) of Damariscotta Bank and Trust, denied knowledge of the phone transactions in an Aug. 31 phone interview.
“No one has ever come to me” with complaints about phone transactions, Conant said. Conant declined to provide the bank’s policy about phone withdrawals or transfers by bank employees or by relatives of account holders.
Later, as Benner’s brother continued to receive notices from the bank about the fraudulent, and now delinquent loan, Benner’s brother contacted Benner to ask, “why he was getting another notice. She said she didn’t know, she’d have Roger [Smith] call him,” Benner’s niece’s mother wrote.
