Michael Graham received the maximum sentence of more than 12 years in prison and was ordered to pay $515 million in restitution for his role in the failure of The First National Bank of Keystone (Keystone), according to the Associated Press (AP). Graham, a former executive vice president of Keystone, reportedly pleaded guilty earlier this year to embezzlement and money laundering charges.
AP said Graham is already serving a federal sentence for interfering with the investigation and was ordered to make $300 monthly payments toward restitution.
The Federal Deposit Insurance Corporation (FDIC) announced in September 1999 that it had been named receiver of Keystone, which was closed by the Office of the Comptroller of the Currency (OCC). In that announcement, the FDIC said that apparent fraud resulted in the depletion of the bank’s capital, and that the OCC found $515 million in loans carried on the bank’s books that should have been removed after they were securitized and sold.
AP reported in 1999 that investigators had recovered 370 boxes of bank records that had been buried in a 100-foot-long trench on property belonging to Terry Church, the bank’s senior executive vice president.
Graham reportedly apologized for his actions.
AP quoted the U.S. District Judge in the case as saying about the sentencing, “I felt like anything less would not be sufficient.”
The story went on to say that four other former bank employees were also sentenced on charges stemming from a federal investigation into the failure, with some of the defendants helping prosecutors win convictions against other defendants.