BALTIMORE– A former Hebron Savings Bank board member was sentenced to one year house arrest followed by two years probation after pleading guilty earlier this year to making a false statement on a loan application or credit card, federal prosecutors said Friday.
Prosecutors said that from 2011 to 2015, Brian Thomas Twilley, of Greenbackville, Va., and formerly of Salisbury, Maryland, served on the board of directors of Hebron Savings Bank, located in Wicomico County, in Maryland, also owned a commercial printing press in Wicomico County and was a faculty member in the Department of Economics and Finance at Salisbury University.
According to his guilty plea, from April 2010 to March 2017, Twilley provided false personal financial statements to Hebron that omitted from his net worth a $200,000 home equity line of credit (“HELOC”) owed to the Bank. 2 which should have been paid off and closed with the proceeds of a separate HELOC that Twilley had obtained from Hebron. Twilley also provided false personal financial statements to Bank 3.
As noted in his plea agreement, in August 2006, Hebron issued Twilley a $350,000 HELOC in an attempt to repay and close his $200,000 HELOC at Bank 2. As part of the approval by Hebron from HELOC, Bank 2 had to release its lien on Twilley’s staff. residence so that Hebron can obtain a first position lien on this guarantee. On August 28, 2006, Twilley signed a letter to Bank 2 ordering them to accept repayment of the loan, close the HELOC account, and forward the release documents to Hebron. The repayment was funded by a check issued by Hebron for $200,392.04, but the letter directing Bank 2 to close the loan was never delivered and Bank 2’s HELOC account remained. open. Twilley admitted that he continued to withdraw funds available in Bank 2’s HELOC and that in 2010 he withdrew all of the $200,000 available.
As a member of Hebron’s board of directors and as a condition of his ongoing loan relationship with Hebron, which included the $350,000 HELOC and several business loans, Twilley was required to provide Hebron with an annual statement of the value personal net. Twilley admitted that from 2010 to 2014 he provided Hebron with his personal financial statement, but did not disclose the continued existence of the HELOC with Bank 2, which Hebron said had been closed since 2006.
Additionally, in December 2014, as part of an application to renew a $100,000 commercial line of credit for his business with Bank 3, Twilley submitted a personal financial statement to Bank 3 that did not did not disclose the existence of the HELOC with Bank 2 and the debts. When Twilley was questioned by a Bank 3 representative as to why his credit report reflected a $200,000 HELOC owed to Bank 2 that was not on his net worth statement, Twilley falsely stated that the Bank 2’s HELOC had been closed when he opened the HELOC in Hebron. Bank 3’s representative advised Twilley that Hebron may wish to contact Bank 2 to close the HELOC as Hebron’s secured position in the collateral could be behind Bank 2 if the lien was not released.
Twilley quit as a member of Hebron’s board of directors in 2015. In 2017, Twilley was having difficulty repaying his debts, and Hebron tried to restructure his loan repayments. As part of the negotiations, on March 17, 2017, Twilley again sent a personal financial statement to Hebron which did not reveal the existence of his HELOC debt with Bank 2, which then had a balance of approximately $176,000, thereby understating Twilley’s account. outstanding obligations. When a representative later suggested that the collateral for the Hebron HELOC be sold, they learned that Bank 2 still held a first position lien on the property because the HELOC with Bank 2 had never been closed. In July 2018, Twilley filed for bankruptcy and Hebron restructured all of Twilley’s personal and business debts. In November 2018, the HELOC collateral was sold and $163,081.88 of the proceeds were paid to Bank 2 as first lien holder, depriving Hebron of the sale proceeds.
As part of his plea deal, which prosecutors announced in January, Twilley will have to pay restitution of $163,081.88, the full amount of the victim’s loss.
Twilley had faced up to 30 years in federal prison for making a false statement when applying for a loan or credit.