EPHRAIM, Utah - For more than a decade, a 9,000-member polygamist sect that believed civilization was about to end was borrowing money like there was no tomorrow.
Members of the sect — a renegade Mormon splinter group called the Fundamentalist Church of Jesus Christ of Latter-day Saints — took out one loan after another from the small-town Bank of Ephraim for business ventures that would prove highly speculative, even half-baked.
One loan went toward a watermelon farm, but not a single melon was ever planted and the bank had to foreclose on the farm. Another loan was taken out by a business that planned to convert military barracks into motels and housing. The venture, in which the church was a partner, collapsed when the barracks were found to have lead paint, asbestos and other hazards. Still another loan was made to a construction company that so underbid municipal sewer and street contracts it was unable to pay for materials, let alone labor. The bank had to write off that loan, too.
Ultimately, the bad loans — along with the embezzlement of nearly $5 million by the bank's head cashier — would lead to the collapse of the 99-year-old bank. Regulators shut it down in June at a cost of millions to shareholders and ordinary depositors who had nothing to do with the sect.
http://story.news.yahoo.com/news?tmpl=story&cid=816&ncid=816&e=1&u=/ap/20041206/ap_on_re_us/failed_bank_sect
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