Former Oklahoma bank CEO charged in bank failure

Former First National Bank of Lindsay, Okla., President and CEO Danny Seibel was charged Dec. 3 in federal court in connection with the bank’s 2024 failure. .Seibel is charged with one count of conspiracy to commit bank fraud, five counts of bank fraud; 10 counts of making false bank entries; one count of obstructing the examination of a financial institution; and one count of failure to maintain an anti-money laundering program in the Western District of Oklahoma. Seibel, while also serving as loan officer, allegedly participated in the fraud between Feb. 25, 2020 and Sept. 20, 2024. He reportedly approved multiple loans to personal friends and neighbors that were neither paid bank nor recorded. According to prosecutors, some borrowers knew Seibel had posted fake loans to their accounts or made fraudulent entries in bank records about their loans and accounts.Two borrowers allegedly asked Seibel to manually add bank funds to their overdrawn accounts when they needed money. Seibel, on several occasions, allegedly claimed disbursed loans were to acquire or improve real estate, vehicles or equipment when they were instead used to repay other loans, gamble, or pay daily expenses. In March 2020, Seibel allegedly authorized a nearly $69,000 loan to a company he co-owned to purchase real estate. He reportedly never made payments on the loan and instead used the bank’s computer system to extend the maturity date on the loan multiple times between 2020-23. In February 2023, Seibel allegedly manually added $526,000 to an account overdrawn by $713,892. He later reportedly created a $400,000 loan to pay off the rest of the overdraft. A member of the bank’s board and executive loan committee, Seibel allegedly manipulated bank records to make loans he authorized or oversaw “seem loans had not matured, were not overdue, or borrowers had never missed a payment,” according to the indictment. “The object of the conspiracy was to enrich certain FNBL borrowers and allow Seibel to maintain his position and stature in the community, as well as his income, as the bank’s president and CEO by concealing the bank’s true financial condition,” the indictment stated. Seibel also allegedly disbursed proceeds to borrowers without recording the transactions in the bank’s software system and did not disclose the extent of the overdrafts or past-due loans to the board or executive loan committee. According to the indictment, Seibel told the executive loan committee in 2024 the bank had less than $170,000 in overdrafts, when records showed that number was $1.36 million. As of June 30, 2024 The First National Bank of Lindsey had $108 million in assets. Of the bank’s $97.5 million in deposits, $7.1 million allegedly exceeded FDIC insurance limits. According to the indictment, Office of the Comptroller of the Currency examiners in August 2024 found bank borrowers had made payments on 100 different loans on June 27, 2024. Seeking more information on the anomaly, examiners requested Seibel provide a Daily Maintenance Report for the day. Seibel allegedly provided a report that excluded the hundreds of changes he had manually made to due dates, maturity dates and times past due of FNBL loans. Seibel was placed on leave Sept. 12, 2024, and fired eight days later. The OCC closed the bank in October after finding “false and deceptive bank records and other information suggesting fraud that revealed depletion of the bank’s capital.” The OCC appointed the FDIC as receiver, and the bank reopened as a branch of First Bank & Trust Co. Seibel, 54, served as president and CEO from 2007-24. He joined First National Bank of Lindsay in 1993. Conspiracy to commit bank fraud, bank fraud and making false bank entries each carry a maximum sentence of 30 years in prison. Obstructing the examination of a financial institution carries a maximum sentence of five years in prison.