The judge sentenced GREGORY T. SMITH, 36, on four counts of financial institution fraud for defrauding First South Farm Credit in Northport of about $1,894,043 between 2007 and 2010. Smith pleaded guilty to the charges in April.

Smith had entered a plea agreement with the government in March, and later admitted to additional fraudulent loans involving an Arkansas banker, Roger Sanders. Sanders has pled guilty to conspiring with Smith to defraud First South Farm Credit of additional $271,000.

Judge Proctor ordered Smith to pay $2.2 million in restitution to First South Farm Credit and to forfeit nearly $1.9 million to the government as proceeds of illegal activity.

“After Smith was confronted with his criminal conduct, he did cooperate with the government and help uncover the fraud involving Sanders,” Vance said. “The overall fraud, however, was significant and devastated First South Farm Credit, a relatively small lending institution. Prison is deserved,” she said.

Smith was employed as branch manager of First South, a financial institution regulated by the Farm Credit Association, when he conducted the fraud. According to court documents, he created bogus mortgage documents, forged signatures of legitimate First South customers on loan documents, falsified loan title policies, used the names of existing Farm Credit customers to create false new loans, and manufactured additional false notes in existing loan files, all in order to falsely disburse more than $2 million in loan proceeds and to avoid detection by auditors.

This case was investigated by the FBI. Assistant U.S. Attorney Pat Meadows prosecuted the case.