A countersuit has been filed against Benton Bancshares by two couples who allegedly failed to pay a debt to the bank. C. Ray Stephens, Angie D. Stephens, Terry L. Gaston and Melanie Gaston defended themselves by saying they were told the loan agreement had been written off by the bank. Their Counter Complaint states that the bank created fraudulent loans in their names to conceal illegal activity.

Benton Bancshares owned Benton Banking Company until January 2008, when it was sold to First Volunteer because of “troubled loans” that threatened its viability. Bancshares is trying to recover those loans, which were not included in the sale, in order to pay shareholders.

Bancshares filed a civil suit in February against Stephens et al, citing non-payment on a $750,000 note made in 2002. In March, Benton Banking Company filed a suit against C. Ray Stephens and Pro Builders Unlimited for alleged non-payment of an $80,000 business line of credit made in 2005.

In the Answer and Counter Complaint filed last week in the Bancshares suit, Stephens et al said they were specifically advised by bank President Jimmy Goddard  that the note and loan had been written off by the bank and no collection effort would be forthcoming. Because of that, they made no further payments. They also said that “one or more officials of Benton Banking Company” created one or more fraudulent notes and/or loan agreements in the name of the Defendant or Defendants, all  without their knowledge, approval or ratification. “The purpose of these fraudulent acts is unknown but is of such a shocking nature that the Plaintiff should be barred from seeking relief in this forum,” the Answer states.

The Counter Claim states that the defendants have had a long standing banking relationship with Benton Banking Company, with various accounts and transactions, including checking accounts and business lines of credit that gave the bank access to sensitive personal information. Stephens et al claim that Benton Banking Company “engaged in fraudulent conduct and it created fraudulent loans” in their names “which were designed to conceal other illegal activities taking place at the bank.” The Counter Complaint states that these activities were undertaken by senior members of the management of the bank without the knowledge of Stephens et al.

They further state that one or more senior members of the Bank had talked to them about the loan in dispute. After Goddard  said the obligation had been written off, they said, Stephens’ business line of credit was renewed, “all in contradiction to the current assertion that he was in default on his obligation.” After that, the Counter Complaint states, the bank wrongfully withdrew money from Stephens’ business account and applied it to other loan obligations without warning or notice to Stephens, causing checks to subcontractors to bounce. After being confronted, the bank said the action would not be repeated, according to the Counter Complaint.

The Counter Claim says the actions of the bank represent a deceptive consumer practice that caused actual financial losses, injury to their business and damaged relationships with business associates. They are seeking damages and “due to the willful nature of the actions” ask that awards  be tripled under the provisions of the state’s Consumer Protection Act.

In answering the suit filed by Benton Banking Company, Stephens and Pros Builders Unlimited states that BBC has never attempted to resolve any matter by phone or written notice regarding the note and further state that they are in full compliance with the terms of the note.