CMP and restitution for OK bank owner and director
The FDIC has issued a Notice of Charges and of Hearing [see PDF file linked above] to Gregg Ward and Susan Ward individually and as institution affliated parties of The First State Bank (in receivership), Camargo, Oklahoma. The Wards are husband and wife. Gregg Ward owned, via the bank's holding company, Camargo Financial Company, Inc. (CFC), 100% of the bank, and was President and Vice Chairman of the bank. Susan Ward was a director of the bank.
The FDIC proposes to prohibit Gregg and Susan Ward from further participation in the affairs of the bank or any other insured depository institution; to order Gregg Ward to make restitution of $1,686,829 for losses sustained by the bank; and to order the payment of civil money penalties of $175,000 and $35,000 by Gregg Ward and Susan Ward, respectively. The Wards had 20 calendar days from service of the Notice to file a request for hearing and an answer to the allegations in the Notice.
The Notice alleges that the Wards were involved in a fraudulent overdraft scheme in violation of Regulation O that provided them with personal benefits and resulted in more than minimal losses to the bank. As part of that scheme, "Gregg Ward and Susan Ward separately and knowingly wrote checks from their personal joint accounts at the Bank when the accounts had insufficient balances, with the knowledge that the Bank would not deduct the amount of those checks from Respondents’ joint checking account balances as was required." The checks were instead debited to a bank general ledger account or to an unrelated dormant bank customer account. "In addition to the [overdraft] activity described above, Gregg Ward also used the same scheme in connection with two of his affiliated business accounts in which he had controlling ownership interests, Western Quick Stops LLC and CFC."
In addition, alleges the Notice, Gregg Ward misappropriated for his own personal benefit fees generated by the Bank from the administration/origination of loans, the sale of credit life insurance, and the sale of GAP insurance for a total of $653,186.82. Gregg Ward is also alleged to have directed the payment of three separate dividend payments totaling $600,000 from the Bank to its holding company, CFC, in violation of State of Oklahoma law. The three dividends were paid without the Board having declared the dividends as required under a State of Oklahoma statute, Okla. Stat. Ann. 6 § 409 (1997).