A Davidson County jury has convicted a Hohenwald man of two counts of theft of property, in amounts totaling close to $2 million, according the District Attorney's office.
Danny Bates was found guilty of stealing money from Sentinel Trust, a business he owned. He was indicted in 2006 after examiners — during a two-year probe — found discrepancies in the corporation’s records, and notified state law enforcement officials.
Bates acted as indentured trustee under numerous bond indenture agreements, and Sentinel was responsible for administering high-risk, high-yield bonds issued by corporate and governmental entities and ensuring that the bondholders received the payments due under the indenture agreements.
But the jury found that instead, Bates diverted $575-thousand from one of Sentinel’s trust accounts to settle a lawsuit, the release said. They also found that he had misappropriated additional funds from the trust accounts to fund the construction of a personal residence in Hohenwald.
Sentinel Trust was an unregulated state-chartered corporation when Bates acquired it in the mid-1980’s. As a result of a change in state law, Sentinel Trust became subject to state regulation in 1999. The company was found to be insolvent in May 2004 and was placed into receivership to protect the interests of bond issuers and bondholders.
Bates' sentencing hearing is set June 5. He faces an eight- to 12-year sentence on each count.