|By Douglas Hanks, The Miami
HeraldMcClatchy-Tribune Regional News
Aug. 30, 2008 - The owner of the troubled Royal Palm hotel in South Beach may be a central player in a Georgia bank's failure.
Federal regulators closed Integrity Bank of Alpharetta, Ga., on Friday, the same day The Wall Street Journal named Coral Gables real estate investor Guy Mitchell as a cause of the parent company's troubles.
The Journal reported Integrity Bancshares lent almost all of its available capital to a single borrower, identified as Mitchell.
Mitchell had his assets seized by a New York judge in June after he and partners failed to pay back a $50 million loan for an aborted condo-hotel project in Chicago.
He's also fighting with partners over the Royal Palm, which he bought for $128 million in 2004 with prolific condo-hotel developer Robert Falor and has since fallen behind on loan payments amid a failed condo conversion.
Mitchell was not immediately available for comment Friday evening.
Though he kept a low profile before his Royal Palm purchase, Mitchell assembled an extensive real estate portfolio, including shopping centers in Georgia and a car wash in Coconut Grove.
In regulatory filings, Integrity acknowledged making 14 loans worth $83 million to companies owned by the same guarantor -- an amount roughly equal to the cash the bank reported having on hand last year.
The story said regulators were looking into whether Integrity violated Georgia banking laws, which limits borrowers from tying up more than 25 percent of a bank's available capital.
Bloomberg News contributed to this report.
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