March 3, 2014
By Bob Coleman
Editor, Coleman Report
Fraud Friday was about disgraced Oklahoma community bank president Dub Moore. Moore’s First National Bank was seized by the feds in 2011 and there are three indictments arising from the closure, the banker, and two borrowers.
Last week, Dub pled guilty to one count of bank fraud. In return for a lenient sentence, we guess, he agreed to testify for the prosecution.
Here is what the government alleges with the second borrower indictment.
Southern Rock had an overdraft of $1.6 million in early February 2011, and the OCC told the bank to expect them to be knocking on the their door very soon. Dub had to act fast since the bank’s legal limit was only $1.2 million.
Dub had a solution. Make Southern Rock a loan and BAM! The overdraft was papered over.
Except the loan went to two straw borrowers that Dub recruited for the scheme. Oh, and our straw borrower weren’t all that clean in the transaction. One got an oil well, the other a truck for their troubles.
How was this done? Roy Lynn Wesberry, convinced one of the straw borrowers to apply for a loan for $340,000 to purchase some more oil wells. When the straw man sat down at the closing table on February 7th he was staring at loan documents for a little over a million dollars. Wesberry convinced the man to sign the papers and that covered about half the overdraft.
The con was repeated with another strawman, an employee of Wesberry’s, on February 10th.
Seems the OCC has seen this before.
From the indictment, “On or about February 16, 2011, the OCC held a discussion with Dub Moore concerning Southern Rock’s overdraft of $1,627,875.00 and violation of legal limiting limits. The OCC examination identified credit losses that exceeded FNB’s capital base. FNB’s books and records were identified inaccurate and the bank was found to be critically undercapitalized. As a result of the violations revealed by the examination, the OCC closed FNB on March 11, 2011.”