Dunn, N.C. — A board member for a Dunn-based bank has resigned his position after getting caught up in a Ponzi scheme run by a fellow board member, according to the bank.

Raymond Lee Mulkey Jr., 63, was found dead in North Myrtle Beach, S.C., on Aug. 16. Authorities ruled his death a suicide.

Dozens of individuals and businesses, including New Century Bank in Dunn, have since filed more than $40 million in claims against his estate, which has assets of $8 million.

Mulkey was on the bank's board, and the bank filed a statement last month with the U.S. Securities and Exchange Commission to disclose that it would write off $11 million in loans because of fraudulent activities by one of its directors.

The bank filed another SEC notice this week that James H. Smith had stepped down from the board because he had lost money that he invested with Mulkey.

Smith said staying on the New Century Bank board would represent a conflict of interest since both he and the bank are creditors to Mulkey's estate.

The state Department of Insurance shut down several of Mulkey's insurance and finance businesses two weeks ago, and state regulators are conducting a criminal investigation.