May 25, 2018

By Bob Coleman
Editor, Fraud Friday

Fraud Friday — Former Camargo State Bank President Jailed for 18 Months for Overdrafts

Community banker Stephen Ward, 53, and two key employees held checks for friends and family, creating overdrafts that brought down 100-year old Oklahoma bank during the Great Recession.

The bank was critically undercapitalized because Ward allowed bank insiders to pay personal and business checks when their accounts had insufficient funds. Between 2006 and 2011, the practice of using deposits of other customers to cover insiders’ overdrafts led certain bank employees to manipulate bank ledgers and records, which caused a significant under-reporting of overdrafts to the Federal Deposit Insurance Corporation. The charges identify numerous instances in which Ward personally took advantage of the bank’s illegal treatment of overdrafts.

Joining him in jail are two of his employees — Nicki Day and Marjorie Cole. Each got a sentence of one year and one day.

Stephen’s restitution is $95,000, Nicki’s $141,000. Margorie was ordered to pay $734,000 to the FDIC and $90,000 to the IRS for failing to report income from her overdrafts on her 2008 federal income tax return.