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Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Press Releases

PR-74-96 (9-10-96)
Media Contact:
Carolyn Ryals (202) 416-2571
Clark Blight (202) 416-2583

Five Houston-area contractors who performed property management work for the FDIC and the Resolution Trust Corporation (RTC) were sentenced in U.S. District Court in Houston last month for defrauding the agencies. Sentences ranged from 8 years in prison to three years probation. All five were also ordered to pay the FDIC restitution totaling $251,343.

The contractors were hired by the FDIC and the RTC to manage several properties the agencies acquired after various financial institutions failed. The properties included two apartment complexes, a shopping center, 1,500 properties/residences, and a commercial building.

Gregory Eugene August, Earline Montgomery, Martha Alexander, and Willie Burns were found guilty in February of 39 federal offenses associated with their contract work with the FDIC and the RTC. Ephraim Tennie entered into a plea agreement and pled guilty to one count.

As part of their scheme, the contractors falsified records to the FDIC and the RTC in order to hire as subcontractors several shell companies they controlled. The defendants then falsely billed the FDIC and the RTC for subcontractor expenses by creating fraudulent invoices and falsely representing that the services had been provided by their shell companies.

In his role as property manger, August also defrauded the RTC by altering invoices he received from legitimate subcontractors and submitting them to the RTC showing higher expenses than were actually incurred.

The investigation was conducted jointly by the FDIC's Office of Inspector General (OIG), the former RTC OIG, and the Federal Bureau of Investigation.

In addition to the ordered restitution, to date the investigation has resulted in recoveries of $180,817; seizures totaling $105,039; recoveries for victims (subcontractors) of $26,875; and fines of $8,500 for two prior indictments and convictions.


Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 12,000 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.

FDIC press releases and other documents are available on the Internet via the World Wide Web at or through Gopher at They may also be obtained through the FDIC's Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 ((703) 562-2200).

Last Updated 07/14/1999

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