Federal banking regulators are suing officials involved with Georgia's largest bank failure.
The action against insiders at Atlanta-based Silverton Bank is aimed at recouping millions of dollars lost from failed Georgia banks.
The Federal Deposit Insurance Corporation has been busy in the state.
Georgia has the most number of bank failures over the past three years.
Now, regulators allege former Silverton Bank officials followed lax lending practices and spent lavishly on airplanes and posh buildings all while the economy -- and their bank -- stood at the brink of collapse.
Canton-based financial fraud investigor Danny Dukes says, the FDIC will have to prove negligence.
"Sound credit is one thing. But to have those type of expenses? Two airplanes?" Dukes says. "I mean, my gosh! That's just poor management of a company."
The suit alleges Silverton officials glossed over problems and ignored warning signs in the economy.
"The unsound credit practices may have some merit. It depends on the insurance coverage," Dukes says. "But the other spending, that certainly is suspect and probably isn't the best way to manage a business."
Regulators are seeking damages of $71 million to replace funds spent insuring bank depositors.
FDIC and state banking officials declined to comment.
Several of the defendants could not be reached.
The lawsuit comes as Georgia banking officials point to signs of improving trends.
"For the second quarter, Georgia banks reported positive quarterly earnings for the first time since September 2008, and collectively they earned about $1.4 billion more during the first half of the year compared to the same time last year," says Joe Brannen, president and CEO, Georgia Bankers Association. "And there are fewer borrowers behind on loan payments than at any point since early 2009."
Georgia has had 68 bank failures since mid-2008.