A federal grand jury returned a 23-count indictment against former Bank of Union Chairman, President, CEO and loan officer John Shelley that charges him with defrauding the El Reno, Okla.-based bank, which failed in January 2014.
Shelley, who resigned from the bank Nov. 30, 2013, was accused of issuing loans with under- or unsecured collateral and falsifying financial statements for several high-dollar bank borrowers, originating nominee loans to circumvent the bank's legal lending limit and concealing the bank's true financial condition from the board. He was also alleged to have solicited a fraudulent investment and falsely represented the bank's true status to the FDIC.
The estimated loss amount stemming from the bank's failure exceeded $100 million as of December, according to a press release that cites the indictment, which includes counts of conspiracy, bank fraud, money laundering, and false statements related to the scheme.
Shelley faces up to 30 years in prison and a fine of up to $1 million on each count with regard to the bank fraud, bank fraud conspiracy, false statement, misapplication of funds, and false entry charges of the indictment. In addition, he faces up to 20 years of imprisonment and a fine of $250,000 on the wire fraud count, along with up to 10 years in prison and a fine of $250,000 as to money laundering.
The indictment seeks forfeiture from Shelley in the amount of the proceeds of the fraudulent schemes and the property involved in the offenses.