A shocking story of a bank failure: Federal prosecutors have indicted two executives of a failed bank in Georgia--Douglas Ballard and Joseph Todd Foster--accusing them of conspiracy, insider trading and bank fraud. Developer Guy Mitchell, who received $80 million in loans from the bank, was also charged with conspiracy and bribery. Specifically, Mitchell stands accused of obtaining much of the money "under false pretenses" and depositing nearly $20 million in a personal checking account, with which he bought luxury items, including a $1.5 million private island in the Bahamas.

The indictment says Mitchell made few, if any, payments on the loans. Instead, it says, he took on additional loans. He is also said to have paid Ballard more than $230,000 in bribes. Mitchell's lawyers said he used a single account for personal and business use, and that he is innocent. Mitchell has pleaded not guilty. Ballard and Foster are accused of dumping their stock based on inside information.

What makes the charges shocking is that the bank, misnamed Integrity, was based on Christian principles. Integrity's motto was "In God We Trust." It gave customers free Bibles, and employees prayed together at meetings. It also gave away 10 percent of annual profits to churches and faith-based charities, donating $1.7 million in 2007. All this will play out in court or in plea negotiations, but it stands as a reminder than Sarbanes-Oxley and other fraud deterrents can only do so much. If executives are bent on fraud, they will find a way. 

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