Sovran Bank N.A. has sued the former president of First State Bank of Wise, Va., in an effort to recover $1.75 million that Sovran contends it lost through fraud, negligence and theft by the former banking official.
Sovran also alleges in the lawsuit, filed in Norfolk Circuit Court, that Carl R. Snodgrass covered up more than $484,600 of loan losses before Sovran's predecessor -- Norfolk-based Virginia National Bank -- bought First State Bank in 1982 for $9.2 million.
As a result of that bank's deceptive financial reports, Virginia National paid too much for the Wise County bank, Sovran contends.
Sovran, which was formed from the merger of Virginia National and Richmond-based First & Merchants National Bank in 1983, is seeking $1.75 million in compensatory damages and another $1 million in punitive damages from Snodgrass.
Snodgrass could not be reached for comment.
He pleaded guilty in U.S. District Court in Roanoke last year to 13 counts of failing to file currency transaction reports with the Internal Revenue Service, two counts of misapplying bank funds and one count of violating federal securities regulations. He was fined $5,000, placed on probation for five years and ordered to perform 200 hours of community service. He also agreed not to return to banking for at least five years.