Former bank president is sentenced to prison

The former president of the failed First State Bank of Camargo was sentenced Thursday to 18 months in federal prison for misapplying bank funds.

“I am sincerely remorseful,” Stephen Gregory Ward told an Oklahoma City federal judge during his sentencing. “I apologize . ... I am here to accept whatever punishment you deem acceptable in this case.”

Ward, 53, of Edmond, was accused of misapplying tens of thousands of dollars in bank funds for his personal benefit. U.S. District Judge Joe Heaton ordered Ward to pay more than $95,000 to the Federal Deposit Insurance Corp.

Ward pleaded guilty last year to conspiracy to misapply bank funds. The offense occurred between 2006 and 2010, according to prosecutors.

He admitted to holding insufficient checks and debits of multiple individuals in a hold account where other bank funds and deposits were used to pay them.

This process of holding checks for customers, friends and family “snowballed,” defense attorney Gary James told the judge.

“When you know the people ... and they tell you they’re going to pay you, you do it,” the defense attorney said. “He thought he was doing it for the benefit of the people . ... He knows what he did was wrong.”

At times, the amount of insufficiently funded checks in “the holds” exceeded $3 million, according to prosecutors.

Assistant U.S. Attorney Kerry Kelly said the case wasn’t just about holding checks but “misapplying millions of dollars in bank funds.”

Camargo is a small town in northwest Oklahoma. The bank opened in 1911 and operated until becoming “critically undercapitalized,” according to prosecutors. Banking regulators closed the bank on Jan. 28, 2011.

James said Ward’s great grandfather founded the bank, which was family operated for generations. The defense attorney said the bank has always held checks for customers but, in this case, things got out of control.

The judge said the “holds scheme” caused the demise of the financial institution. The judge also noted Ward took steps to conceal the bank’s overdraft problem. This included telling employees to cover up the scheme before

bank examiners visited, the judge said.

Ward also had select customers take out loans to clear their insufficient items, according to prosecutors. The judge said the bank’s failure was, in part, due to the “rapid deterioration in loan quality.”

Others charged

Two other former bank employees were sentenced Thursday.

Nicki S. Day, 60, pleaded guilty last year to conspiracy to misapply bank funds. The judge sentenced her to one year and a day in prison plus more than $140,000 in restitution to the FDIC.

She worked at the bank from 1980 until January 2011. She held various bank positions including vice president and director.

She admitted to placing holds on insufficient checks “longer

than allowed.” She also “changed numbers on the books so a ledger would balance,” plea paperwork shows.

“I’m truly sorry,” she told the judge. “I know it was wrong.”

The other employee, Marjorie H. Cole, 59, pleaded guilty in 2016 to conspiracy to commit bank fraud and tax fraud. The judge sentenced her to one year and a day in prison plus more than $820,000 in restitution, most of which goes to the FDIC.

She worked at the bank in various positions from 1993 until January 2011. She admitted to obtaining money by falsifying bank records.

“I regret what I did and I am truly sorry,” Cole said.

The judge noted the restitution amounts for Ward, Day and Cole coincided with what they diverted for personal use and hadn’t yet paid back.