Community Bank President Sentenced for Concealing Losses and Misusing Bank Funds
December 19, 2025
Bob Coleman
Founder & Publisher
Community Bank President Sentenced for Concealing Losses and Misusing Bank Funds
Former community bank president Aaron Johnson pleaded guilty to federal charges related to the misuse of bank funds and the concealment of losses at Farmers Bank of Carnegie, Oklahoma. Johnson, a sixth-generation member of the bank’s founding family, assumed leadership of the federally insured institution at age 34. The bank was founded in 1907 and served a rural community of fewer than 2,000 people.
Johnson assumed the role of president at age 34 after his father, a former director of the bank, became subject to regulatory action. In 2019, regulators issued a cease-and-desist order against Johnson’s father for unsafe and unsound practices and breaches of fiduciary duty. The order cited failures to address a bank officer’s misuse of funds and the acceptance of insider loans on preferential terms without proper approval. The findings were issued without admission or denial.
According to sentencing materials, Johnson incurred significant personal expenses while serving as president. Prosecutors described him as an executive who spent heavily on clothing, travel, and lifestyle-related items. He promoted himself publicly driving a luxury vehicle, wearing high-end jewelry, and producing a promotional video for the bank. His office included amenities such as a custom ping-pong table, an electric scooter, a coffee bar, and nontraditional décor. While some expenditures were characterized as marketing-related, regulators focused on Johnson’s handling of bank funds.
Johnson used a bank-issued American Express card for personal expenses, resulting in an overdraft in the bank’s operating account that reached approximately $200,000. Given the bank’s reported earnings, the overdraft was material and should have been recognized as a loss.
Instead, Johnson approved an increase in a loan to a fellow board member from approximately $1.2 million to $1.4 million without proper authorization. Loan proceeds were wired to the borrower, transferred back to Johnson, and used to cover the overdraft. The transaction converted what should have been a loss into a loan asset on the bank’s books, overstating profitability and concealing the bank’s true financial condition.
Court records detail additional personal expenditures charged to the bank, including an $18,349 timeshare purchase, approximately $48,600 for a home entertainment system, $5,000 in cash withdrawals, and personal expenses that were reimbursed twice.
When questioned by regulators about the source of funds used to cover the overdraft, Johnson stated he had sold cryptocurrency. He was unable to provide documentation to support the claim. The explanation did not withstand regulatory review.
Johnson pleaded guilty and was sentenced to six months of imprisonment, followed by one year of home confinement, and ordered to pay $100,000 in restitution. Prosecutors had sought a sentence of 15-21 months.
The regulatory actions related to Farmers Bank extended beyond Johnson. Other individuals associated with the institution were issued cease-and-desist orders and prohibited from participating in the banking industry.