Legacy torn apart Feud: The Bank of Glen Burnie was formed nearly 50 years ago by the patriarchs of the town. The greed, jealousy and suspicion of the children of those men are tearing the bank apart.

March 29, 1998|By Bill Atkinson and Greg Schneider | Bill Atkinson and Greg Schneider,SUN STAFF TTC

In the back-room restaurant of the B&A train station, the patriarchs of Glen Burnie held court nearly every day, parceling out success or failure over lunch and the whir of slot machines.

By 1949, they decided their town needed a bank, so they started one. They walked up and down streets selling stock door-to-door, and some families have been able to live off their initial investment in the Bank of Glen Burnie.

Now the children of those men are running the bank, and they are tearing it apart.

Greed, jealousy and suspicion have destroyed friendships forged more than 50 years ago by the forebears of still-prominent families -- Kuethes, Demyans and Heins. Relatives have insulted and even filed charges against each other. Two men with ties to the bank are serving jail sentences.

After three battles for control during the past four years, an out-of-town institution is poised to move in and take over.

"It is bitter now," said Earl G. Walter, a retired Bank of Glen Burnie executive who worked there for 39 years. "It is a sad mark on the community."

The bank and its parent company, Glen Burnie Bancorp, are small, with six branches and $232 million in assets. The bank's influence has largely been confined to Glen Burnie, where it has made thousands of mortgage loans and helped finance the restaurants, auto dealers and retailers that transformed the town from a crossroads into a sprawling suburb.

But it was an outsider, community members say, who sparked the fight that now consumes them.

No one seems sure how he wound up there, but at some point around 1991 a man named Brian H. Davis began doing business at the Bank of Glen Burnie, taking out loans to build what appeared to be a thriving Baltimore trucking business.

Davis was a throwback to the old-fashioned practice of doing business over handshakes and drinks. After a few years, bank President Jan W. Clark became suspicious of the slick, name-dropping Davis, who boasted of heavyweight political ties and who liked to distribute gifts such as wine, dinners and autographed baseballs to bank officers.

Just as Clark notified bank regulators that he suspected Davis and a loan officer of criminal wrongdoing, two men stepped forward in 1995 and seized control of the bank. They were F. William Kuethe Jr. and John E. "Jack" Demyan, the sons of the bank's two most powerful founders.

Davis, the sons felt, was a distraction from the real problem -- that the bank was being poorly managed.

Their actions were swift, severe and polarizing. Instead of severing ties to Davis, they seemed to embrace him. Kuethe and Demyan ordered the board of directors to fire the bank president who had sounded the alarm about Davis. When the board refused, they cleaned out the directors and fired the president themselves. They rehired the loan officer who oversaw all relations with Davis.

Davis turned out to be a fraud. His trucking company went bankrupt later that year, and the little Glen Burnie bank was left holding the bag on about $6 million in bad loans. The bank lost a total of $2.7 million in 1995 and 1996, and its average stock price fell to $24.75 a share last year from around $40 in 1995.

Loan officer Stephen Boyd was investigated for criminal wrongdoing, and eventually he and Davis went to jail for their dealings.

Now Kuethe and Demyan have control of a struggling institution. A series of lawsuits are draining their time and the bank's resources, and the half-century of good will built up in the community toward their families is slowly being burned away.

It was Jack Demyan who reached out for family support during the emotional time when he and Kuethe cleaned out the old board of directors.

The board had been loaded with cronies of the founding fathers. But the sons believed the bank had lost its way. They blamed the president for "micro-managing" the bank, for angering an important client who was threatening to file a discrimination lawsuit, and for sacking loan officer Boyd, who they argued had been unfairly judged for his dealings with Davis.

Sending a message

By ousting the board, they sent the message that they were in control after years of remaining in the background, and that old friendships wouldn't stand in the way of business.

"We knew it was fateful. We didn't know to what degree there would be ill feeling and how long it would remain," Kuethe said.

In late 1994, Jack Demyan walked across Crain Highway from the bank to a small frame house where his cousin, Susan Demyan, practices law. There had been a break between their fathers over their grandmother's estate, but now that that generation was gone, Jack told her, there was no reason they couldn't start fresh.

When he asked her to consider joining the bank's board, she was thrilled. Susan remembered how proud her late father, one of two dentists in the town, had been when he became a board member. She had shined his brown shoes before every meeting. Now she felt that she would be filling his seat. She accepted.

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