LONDON, Ky. — Edward Keith Smith, former President of Citizens Bank in Mt. Vernon, Ky., was sentenced today by U.S. District Judge Danny C. Reeves to 30 months in federal prison for issuing letters of credit without authority, after pleading guilty in October of last year.

Smith, 55, of Mt. Vernon, Ky. was indicted in July of last year and pleaded guilty to three counts of the indictment. The Indictment alleged that in 2003, Smith caused Citizens Bank to issue unauthorized letters of credit so that he and his wife could get loans from the First Trust Bank in Oneida, Tn.

Smith caused Citizens to issue letters of credit on three separate occasions, twice in April of 2003 for $800,000 and a $100,000, and once in July of 2003 for a $700,000. Letters of credit in those amounts should have been approved by Citizens’ Board of Directors.

Smith was not ordered to pay restitution to Citizens Bank because the bank had already entered an agreement with Smith concerning repayment as part of Smith’s bankruptcy action.

Under federal law, Smith must serve eighty-five percent of his prison sentence. Upon release from prison, Smith will be under the supervision of the United States Probation Office for three years. Smith was ordered to start serving his sentence in March.

Amul R. Thapar, U.S. Attorney for the Eastern District of Kentucky; and Tracy A. Reinhold, Special Agent in Charge of the Federal Bureau of Investigation, jointly made the announcement after the sentencing.

The investigation of the case was conducted by the Federal Bureau of Investigation. The United States was represented at the sentencing by Assistant United States Attorney David Grise.

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