Judge OKs Gold Banc $16 million settlement

Saturday, November 20th 2004, 4:27 pm
By: News On 6

A federal judge approved a settlement on Friday in which Gold Banc Corp. Inc. paid $16 million to end a lawsuit over farm loans in Oklahoma.

Gold Banc transferred the money on Tuesday to the U.S. Attorney's office in Oklahoma City. It also has paid $500,000 to cover attorney fees and expenses of the person who brought the suit under a federal whistle-blower statute.

The Leawood-based banking company had announced the tentative settlement in August and recorded the costs against its earnings in the third quarter.

U.S. District Judge David L. Russell approved the settlement Friday as reasonable and fair and dismissed the lawsuit.

Gold Banc has said the suit alleged that banks it acquired in Oklahoma and Kansas had violated rules of the Farm Service Agency Guaranteed Loan Program.

The lawsuit alleged that the banks charged excessive interest rates and fees on the loans and submitted false certifications and claims under the program.

Gold Banc agreed to the settlement but denied allegations of wrongdoing. The settlement avoids the time, expense and risk of continuing the legal case, the company said.

Gold Banc has said it ultimately could have faced more than $40 million in claims under the suit.

Shares of Gold Banc gained 3 cents Friday to close at $14.78.