John Shelley, former chairman, president, CEO and loan officer of failed Bank of Union, has been sentenced to four years in federal prison for making a false statement to the Federal Deposit Insurance Corp.
The ruling, announced by Robert Troester of the U.S. Attorney's Office, also ordered Shelley to pay approximately $137.4 million in restitution. The indictment also charged that Shelley misled a partial owner and investor in the bank in 2012 into wiring $40 million to the bank even though he knew that it was on the brink of failure. The partial owner is due $40 million of the restitution amount. Shelley owes the remaining approximately $97.4 million to the FDIC, which lost money when it assumed the bank's liabilities in January 2014, when Bank of Union failed.
According to the indictment, Shelley also conspired with certain borrowers of Bank of Union from approximately 2009 through November 2013 to defraud the bank by issuing them millions of dollars in loan proceeds secured by collateral they did not have.
A federal grand jury returned a 23-count indictment against Shelley in December 2016 that charged him with defrauding the failed El Reno, Okla.-based bank.
On Sept. 18, 2017, Shelley pleaded guilty to making a false statement to the FDIC on July 30, 2013, when he falsely represented in writing that the bank had total equity capital of about $36.3 million when he knew the bank's equity capital was significantly less.