FDIC Seeks $127M From Mutual Bank's Ex-Directors

Law360, New York (October 25, 2011, 7:02 PM EDT) -- The Federal Deposit Insurance Corp. on Tuesday sued the former directors of Illinois-based Mutual Bank, accusing them of costing the now-defunct institution $127 million in bad loans, illegal dividend payments and wasted corporate assets.

The FDIC, acting as receiver for Mutual Bank, said it wanted to recover $115.4 million lost in 12 risky loans approved by the board, $10.5 million in dividend payments that went primarily to ex-Chairman Pethinaidu Veluchamy, and $1.09 million spent on friends and family of board members.

The FDIC blames the downfall...
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Case Information

Case Title

Federal Deposit Insurance Corporation vs. Mahajan et al.

Case Number



Illinois Northern

Nature of Suit

430(Banks and Banking)


Honorable Virginia M. Kendall

Date Filed

October 25, 2011

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