Provost vFirst Guaranty Bank et al,  Civil Action No. 2:18-cv-08845 (Eastern District of Louisiana)

This case alleges a discriminatory scheme by First Guaranty Bank and its executives to profit at the expense of, impair and extinguish the sugarcane farm of Wenceslaus Provost, Jr., one of the last remaining African-American sugarcane farmers in Louisiana, and to replace him with white sugarcane farmers.

Mr. Provost is an experienced and skilled sugarcane farmer. He grew up working extensively on his father’s sugarcane farm, and when he launched his own farm in 2008, he received the award for Iberia Parish Farm Bureau Farmer of the Year due to his outstanding farming practices.

The lawsuit alleges that despite Mr. Provost’s evident competency, First Guaranty Bank engaged in multiple discriminatory and fraudulent acts to drive Mr. Provost out of the sugarcane farming business.  The lawsuit alleges that, from 2008 through 2015, First Guaranty Bank and its Senior Vice President Glenn Duhon engaged in a multi-faceted scheme to deprived Mr. Provost of timely, adequate, and fair crop loans to effectively operate his farm.  Specifically, the lawsuit alleges that First Guaranty Bank and Senior Vice President Duhon:

i. routinely instructed Mr. Provost to sign blank crop loan applications;
ii. unilaterally filled out the terms of those crop loan applications without disclosing the completed applications to Mr. Provost;
iii. required Mr. Provost to unnecessarily assume unrelated, significant debt belonging to his father as a condition of receiving crop loans;
iv. required Mr. Provost to provide excessive collateral as a condition of receiving crop loans;
v. required Mr. Provost to lease equipment to M.A. Patout on highly unfavorable terms as a condition of receiving crop loans;
vi. prohibited Mr. Provost from operating through a limited liability corporation or from purchasing his father’s farmland;
vii. required Mr. Provost to reduce the acreage of his farm as a condition of receiving crop loans;
viii. repeatedly awarded Mr. Provost crop loans that were substantially smaller in value than what was requested and necessary to effectively operate his farm;
ix. modified, without disclosure, Mr. Provost’s loan applications to reduce his loan amounts by, among other actions, photocopying his signature;
x. diverted monies, without disclosure, from Mr. Provost’s crop loans to prematurely compensate M.A. Patout;
xi. repeatedly and without disclosure diverted monies from Mr. Provost’s crop loans to prematurely discharge debts from prior years’ crop loans;
xii. repeatedly and without disclosure diverted monies from Mr. Provost’s crop loans to prematurely discharge other non-guaranteed loans maintained by First Guaranty Bank;
xiii. delayed, without disclosure, the approval of Mr. Provost’s loan applications in 2012 and 2014;
xiv. routinely charged Mr. Provost unreasonably inflated interest rates on crop loans and non-guaranteed loans;
xv. facilitated M.A. Patout’s decision in 2014 to stop accepting sugarcane harvested by Mr. Provost, in clear breach of his contract with the mill;
xvi. rejected Mr. Provost’s crop loan applications in 2013 and 2015;
xvii. forced Mr. Provost alone to pay down three loans taken by his father even though Mr. Provost’s two brothers were also co-signers on those loans; and
xviii. repeatedly failed to disclose to Mr. Provost the multiple adverse credit actions and decisions made by the bank regarding the loans awarded to him.

The lawsuit alleges that, to effectuate the scheme, First Guaranty Bank and Senior Vice President Duhon made multiple, knowing misrepresentations to the United States Department of Agriculture ("USDA") through crop loan applications and other communications. The lawsuit alleges that those material misrepresentations allowed First Guaranty Bank and Senior Vice President Duhon to secure valuable USDA loan guarantees while simultaneously concealing from USDA that they were saddling Mr. Provost with unwanted and unnecessary debts, diverting substantial crop loan funds to prematurely discharge other loans, and denying crop loans to Mr. Provost based on false pretenses.

The lawsuit alleges that the effect of Defendants’ misconduct was predictable and known to Defendants: without access to timely and sufficient crop loan monies, and subject to unfair loan terms and multiple other discriminatory acts, Mr. Provost was unable to generate a sufficient yield from his farming operations and was ultimately forced to exit the sugarcane farming business in 2015. The lawsuit alleges that the financial and emotional costs to Mr. Provost and his family as a result of Defendants’ misconduct were severe, including the loss of their business and home and the need for psychological treatment for depression and anxiety.

This case filed by Mr. Provost seeks to recover the damages directly caused by Defendants’ unlawful conduct. The lawsuit alleges that the misconduct engaged by Defendants violated the Equal Credit Opportunity Act, the Racketeer Influenced and Corrupt Organizations Act, and the law of unjust enrichment.

A copy of the complaint can be found HERE .

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