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  Sect Took Out Loans Ahead of 'Doomsday'
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Last EditedRP  Dec 07, 2004 02:47pm
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MediaWebsite - Yahoo News: Iran
News DateMonday, December 6, 2004 06:00:00 AM UTC0:0
DescriptionEPHRAIM, 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.

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.

At one point, the amount of money borrowed by members of the sect amounted to around $18 million, or about 90 percent of the institution's loan portfolio — three times higher than what prudent bank management dictates, regulators said.

Church said he puts much of the blame for the bank's failure on a lack of aggressive oversight by regulators.
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