Ten former directors and officers of Bainbridge Island’s defunct American Marine Bank are being sued over allegations of allowing $18 million in irresponsible loans.

The bank originally opened in 1948 by islanders who desired a financial institution a little closer than Seattle.

When the bank went under on Jan. 29, 2010, the Federal Deposit Insurance Corporation took over responsibility of American Marine Bank’s finances. The FDIC is suing four officers and six directors of the bank for breach of fiduciary duty, gross negligence and negligence, according to documents filed in the U.S. District Court in Tacoma on Jan. 25.

A jury trial has been demanded by the FDIC.

Allegations range from officials using high-risk growth strategies and poorly collateralized loans, to directors ignoring regulatory criticisms regarding the institution’s loans.

The defendants also allegedly ignored their own policies on 11 loans and are accused of being negligent in the process to approve them.

Every loan passed through approval by one or more of the bank’s officers and board members. All were approved by the bank’s former president and CEO Rex Townsend.

Despite multiple warnings from regulators in 2005 through 2007 about its lending practices, the bank continued to ignore its own policies that were meant to act as safeguards, according to court documents, such as policies against making loans to parties with inadequate appraisals or proof they could repay the loan.

Even after the bank was warned in May, July and October of 2007 that the crippled real estate market posed risks to lending, the bank increased commercial real estate loans by 370 percent. Acquisition, development and construction loans went up by 255 percent.

The FDIC said the “bank’s condition deteriorated as the real estate markets declined” because of its “deficient risk management.”

The lawsuit alleges that Townsend expedited consideration of poorly collateralized loans from out of the area.

On one particular occasion, the lawsuit alleges, Townsend “crammed down” a $3 million loan to Western Pennsylvania Senior Living Center without delegated authority, according to court documents.

Former chief credit officer Barbara Kaye and former executive vice president Renzo Lucioni are also officers cited in the lawsuit.

Gary Winter was also named as a defendant in the case as a former executive vice president. Winter also worked as a chief credit officer and a member of the bank’s Officer’s Credit Committee and Senior Loan Committee at American Marine Bank.

Bess Alpaugh, Carl Berg, Jeffrey Goller, Thomas Kilbane, Andrew Mueller and Alice Tawresey are all cited as directors of the bank and were also named in the lawsuit. They also all served on the bank’s various loan committees.

Tawresey is a former mayor of Winslow from 1978 to 1990.

The FDIC’s lawsuit alleges American Marine Bank violated its own lending polices on 11 loans:

Midtown JV: $4 million

River Canyon: $4 million

Pacifica: $1.95 million

Western PA: $3 million

Umani: $3.22 million

Summerhill Est.: $1.406 million

WCC Tenzen: $5 million

Spanaway 19: $1.1 million

Quincy Street: $1.845 million

Campus Crest: $4 million

Robert & Brenda’s: $3.2 million