The Rise and Fall of Jerry Williams
Behind the celebrated banker's financial misdeeds that sent him to jail and caused such pain for others.
Let’s just get this out of the way at the start—Jerry Williams had us fooled.
Gulfshore Life named him Man of the Year in 2006 less than 10 months before his bank first came under federal scrutiny for “unlawful, unsafe or unsound” practices. In two years, the government shut down Williams’ bank, Orion Bank, which was taken over by Louisiana-based IberiaBank. And, by 2011, he had been charged with enough counts of fraud to put him away for life.
But it wasn’t just us. In the half decade leading up to his monumental fall from grace, Williams had racked up accolades from just about everyone, locally and nationally. He’d been named to the local Junior League Hall of Fame and the national community banker of the year. He was chairman of the Florida Bankers Association, board member of the Federal Home Loan Bank of Atlanta and on the government relations council of the American Bankers Association.
More tellingly, he seemed to have fooled himself. In his Man of the Year interview, Williams told Gulfshore Life the quality he most admired in others was “honesty— that means being honest with yourself, too.”
A long-time friend of his tells it a different way. At the height of his legal problems, while he was out on bail awaiting his trial, the friend, a fellow banking titan who asked not to be named, ran into Williams in a doctor’s office. She had known Williams since he came to Naples from the Keys in the mid-’90s and was a friend of his current wife, Heather. So, “he had no reason to lie to me.”
“I was determined not to bring it up,” the friend says of Williams’ legal problems. “But he started talking about it, talking about how his kids were worried about things. He said, ‘They ask me if everything is going to be all right. I keep telling them, yes, I didn’t do anything wrong.’
“The thing is, he believed what he was saying. At that moment, I wondered if I really ever knew him. Here’s this man I knew on a personal level as a very warm, wonderful person. But I also knew that professionally what he did was really wrong, but that he couldn’t see it.”
Eventually he did see it, at least enough to sign a plea agreement a year ago that saw him admit to crimes that put him behind bars for six years. But that was more than two years after the Feds shut Orion down, during which time he vehemently denied that he was anything other than what he’d always been—a man trying to grow the best little bank in Southwest Florida.
He’s never publicly apologized for his wrong doing. He never apologized for wiping out more than $30 million in retirement savings for his employees. As far as anyone is saying, he’s never said the words “I’m sorry” at all.
“That’s because he has no remorse,” says Patrick Miller, a former senior vice president at Orion, whose losses on paper were in the millions and who owned about 50,000 shares when the bank collapsed.
Williams, through his lawyers, did not respond to repeated requests to comment for this story. His wife, who was approached by a family friend on behalf of Gulfshore Life, declined to comment. As of press time, lawyers for his co-conspirators and the men themselves— Thomas Hebble, Angel Guerzon, and Francesco “Frank” Mileto, all of whom are currently serving time for their crimes—declined to comment or were unable to be reached.
Williams about to board Orion's Piaggo Avanti private plane.
At his peak, Jerry Williams was worth somewhere in the neighborhood of $130 million. And he lived like it. He had all the trappings of a high-powered executive, even though he still worked at a community bank. He lived in an exclusive, gated community (Grey Oaks), drove a German luxury car (a black 7 series BMW) and flew around on a private plane (Orion’s $6 million Piaggio Avanti P180).
But much of that life was, like his bank, a highly leveraged mirage. In a piece last year, Florida Trend estimated that perhaps less than $1 million of his worth was actually liquid, the rest tied up in his 24 percent stake in Orion. He had debt payments totaling somewhere in the neighborhood of $750,000 a year, sustaining his lifestyle with his salary and the generous dividend payments he as CEO approved to shareholders, of which he was by far the largest.
Mention his generosity in the community to Pat Miller, the admittedly disgruntled former employee, and he scoff s. “I’d love it if someone could prove whether that money came from him or from the bank,” he says. “I don’t know how much money Jerry actually had on hand.”
Still, his outward appearance was one that is pretty familiar in Naples. He attended high-priced charity dinners and co-owned a popular downtown Naples restaurant with his buddy Dave Wannstedt, an Orion shareholder and former NFL and college coach. With his wife, he was involved in First Presbyterian Church. Among other charities, he donated to the Sarasota Film Festival and gave $10,000 a year to local restaurateur Skip Quillen’s Karma Club, which helps children’s causes.
There were many, many reasons to think this kid from Athens, Texas, the one who mowed lawns and had a paper route to make money growing up, was the real deal.
A close friend described him as an extremely charming, warm and friendly person and a dear friend. But Miller says that’s just the side Williams wanted you to see.
“He was a gifted salesman,” he says.
“He could be charming. He couldmake you believe it.”
But there was also a dark side known to some of his employees. At Williams’ sentencing hearing,
Miller spoke on behalf of the Orion employees who wanted to see a stiff sentence for their former boss. In his remarks, he brought forward a pattern of repeated oral abuse.
“He told people a trained monkey could do their job,” Miller says. “He told me, at a time when I was putting in 50 or 60 hours a week, that since I’d gotten married, I’d stopped working hard.”
Miller accuses Williams of mocking coworkers’ weight, of claiming he alone built the company and that any losses the employees might suffer during the collapse was “chump change.”
Other employees, though, told different stories. In court documents, there are mentions of Williams, along with other employees, checking on his team after hurricanes, arranging flights for employees to visit ailing parents, creating on-site child-care opportunities for new parents and encouraging them to get involved in the communities they served.
“Jerry led by example through his strong work ethic, integrity and drive for continuous improvement,” former Orion CFO Carla Pollard said in a 2012 statement on his behalf.
Williams came to Naples in 1994 hoping to grow a bank he’d taken over in the Florida Keys before he’d even turned 30. There the competition was fierce and opportunities limited. But Williams saw Southwest Florida as ripe for opportunity. Orion Bank was formed in 2002 when Williams’ Florida Keys First National Bank and his Gulf Coast National Bank merged.
Miller met him soon after Williams got to Southwest Florida when the two were introduced by another banking colleague. “I was in at the ground floor,” Miller says. “At the time, it was a great business. We were making money and growing the business slowly.”
The plan was just to stay in Naples, where Miller and others had been banking in the market for decades. They knew all the players, knew who was good for the money, knew who could pull together the land deals and knew whom to trust.
“Even when we moved into Fort Myers, it was good,” Miller, now a vice president at Encore National Bank, says. “We knew what we were doing.”
But by the early 2000s, it was clear that what had been a steady real estate increase was about to become a boom and not just in Southwest Florida. By then, Williams’ desire for increasingly large growth year over year had become insatiable. Growing 20 percent a year wasn’t too hard when you are a bank worth a few hundred million. When you move up over $1 billion, it starts to get a lot harder, Miller says. And so Williams began a campaign of rampant expansion. At one point, Orion was the largest private bank in Florida and in the top 1 percent of private banks nationwide.
Then things got really crazy in the housing bubble, especially in Sarasota.
“When we went into Sarasota, that’s when things went bad,” Miller says.
Harvey Kaltsas and Jerry Williams discuss plans for Kaltsas' feng shui-designed condo tower in Sarasota.
That’s where Williams would go on to make deals like approving a $24 million loan to Sarasota acupuncturist Harvey Kaltsas, who admitted to the Sarasota Herald-Tribune he made at most $100,000 a year, to build a condo tower based on feng shui concepts. In a 2006 story in Gulfshore Business about Williams’ banking acumen, Kaltsas was used as an example of Williams risk taking. No one else in town would offer him a loan.
The building was initially a success, but, when the housing market collapsed, the speculative nature of many purchases put several of the units into foreclosure.
Orion was one of the banks caught up in the flipping scandals that put Sarasota on the map nationally at the end of the last decade. Most notoriously, it loaned money to Neil Mohammad Husani, the infamous real estate scammer who is currently fleeing authorities abroad. Husani set up fraudulent sales that allowed him to borrow more than $80 million against the value of properties.
Mileto, too, was a con-man using the real estate bubble to defraud banks. Mileto claimed to be an heir to an Italian fortune with vast American land holdings. According to the sentencing documents in Williams’ case, by the time he entered into the deal that brought down his run as CEO, Williams knew that Mileto was not whom he claimed to be.
The deal Mileto, Williams, Hebble and Guerzon, along with other unindicted co-conspirators, set up was a complex loan that involved distressed assets on Orion’s books, a borrower over his legally allowable borrowing limit and illegally funneling some of the loan back into Orion stock. In the end, Orion gave Mileto $80 million through a few shell corporations in exchange for those corporations using $15 million to buy stock in Orion’s holding company. This money, along with a $10 million investment Williams secured from a long-time client, allowed him to tell regulators he had secured an infusion of cash, even though much of it was actually Orion’s own money.
Williams’ lawyers claim that Orion was most likely destined to fail because of its exposure to commercial lending, which made up the vast majority of its business. Hundreds of smaller institutions did fail between 2008 and 2010. Actually, 2012 was the first year bank failings were below their 2006 numbers according to an Associated Press report.
The government agrees with them here saying in an FDIC report that the bank “failed to acknowledge the extent of the real estate market downturn and was slow in recognizing and mitigating credit risk exposure.”
But that could be because few people outside of Williams knew the totality of the bank’s situation and few of those who did knew what the numbers might mean. He surrounded himself with directors who had little to no banking experience. And as Miller tells it, the senior management team, which despite his title of senior vice president he says he was not a part of, was full of “yes men.”
“Jerry controlled everything,” Miller says. “Jerry knew exactly what position the bank was in at all times.” And he knew his own financial position, which became precarious once federal regulators told Orion to stop making large dividend payments to stock holders after the percentage of the bank’s loans more than 90 days past due went above five percent in June 2008.
With his own debt to service and less income, he needed to sell some of his Orion stock in order to make ends meet. At the same time the Federal Reserve Bank of Atlanta was issuing its ruling that Orion needed to recapitalize, Williams sold about 18,000 shares of Orion stock to the company’s employee stock program for a little more than $1 million.
He would also sell about $700,000 of his own stock to three friends, including Wannstedt, by telling them that it was for a sick client who needed to unload the stock to pay for medical expenses.
And at the same time, Miller says he was encouraging employees to invest more into the company, which, despite paying out $28 million in dividend payments in 2007, reported a loss of about $6 million, according to a Herald Tribune report.
“Many of us felt our job would be in jeopardy if we did not (continue buying company stock),” Miller said at Williams sentencing hearing.
“Over time, he repeatedly misrepresented to us, with deceitful promises and lies, that our investment was safe and managed with high standards of honesty and integrity.”
So why would williams take the drastic step of entering into a deal he knew to be illegal with a man whom he knew to be a fraud? Why would he lie to his friends and sell them his own stock, but say it was or a sick client? Why would he lie to federal investigators instead of trying to get help during the bank bailout era? Why would he tell his long-time colleagues to keep buying stock in a company that needed drastic measures in order to be saved? This is where opinions really diverge.
“That’s what’s got me perplexed,” says Quillen, owner of Culinary Concepts, a restaurant business that started with financing from Orion. Quillen says he didn’t know Williams personally outside of a few casual meetings. “But I think it bummed everybody out with the way it turned out.”
“He’s greedy and power hungry,” Miller says. “There was capital to be had, but he would have had to dilute the value of the shares and his control of the company.”
Or maybe, it’s as William’s attorneys suggest in their written plea for a reduced sentence, that “his sole motivation in engaging in the crimes construction site, Borelli is circumspect as he discusses his losses and Williams’ motivations.
“A mentor of mine convinced me to invest,” he says.
“I bought in at $20 a share, but at one point I could have sold for $45. I was holding out for more.
“(Orion) was a great place to do business. I didn’t have knowledge of anything bad about anyone there. In the end, I think he was trying to save his bank. I don’t agree with what he did, but I understand the pressure.
“I feel sorry for everyone’s sake.”
Williams is in the Federal Prison Camp on Maxwell Air Force Base in Montgomery,Ala. His Grey Oaks home was foreclosed on in 2011. At the time of his sentencing, his net worth was estimated at a negative $3.5 million and he owes more than $700,000 in restitution to the threeinvestors to whom he sold his personal stock, $31 million to the FDIC and an undisclosed amount in a confidential settlement with the former employees of Orion.
He is eligible for release in 2017.