OKLAHOMA CITY– A former executive of Farmers Bank in Carnegie pleaded guilty last week to defrauding the institution, U.S. Attorney Robert J. Troester announced.
Aaron D. Johnson, 42, of Oklahoma City, was charged with bank fraud on Jan. 3. He is the son of “Larry” Johnson, former chairman of the bank’s board of directors.
Aaron Johnson became the president and chief executive officer of Farmers Bank of Carnegie in 2016, at the age of 34. In that role he had access to the bank’s operating account credit card.
A forensic audit performed by the accounting firm BKD determined that Johnson was responsible for $398,389 in personal charges on the AmEx card. He reimbursed the bank for $371,000, leaving a balance due of $27,389 plus $18,171 in interest owed on the personal charges.
According to information filed by investigators, between September 2017 and late July 2018 Johnson used the bank’s American Express card to pay his personal expenses, causing an overdraft of approximately $200,000 in the bank’s operating account.
On July 30, 2018, Johnson approved a modification to a loan, without approval from the bank’s board of directors, that renewed the loan in an increased amount. The federal felony charge further alleged that Johnson caused a $200,000 advance on the loan, wired the money into an account he controlled, and used the $200,000 to repay the overdraft that he caused.
Johnson pleaded guilty in Oklahoma City’s Western District federal court on Feb. 4 and admitted he knowingly executed a scheme to obtain money from the bank by means of false or fraudulent pretenses. At sentencing, he faces up to 30 years in federal prison and a fine of up to $1 million.
The case was investigated by the Federal Deposit Insurance Corp.’s Office of Inspector General.
The FDIC previously levied sanctions against three former officers of The Farmers Bank of Carnegie for improper activities. The allegations included “insider abuse” for extending six-figure loans to the then-CFO’s brother who is serving a federal prison sentence for healthcare fraud and opioid distribution that resulted in five deaths.
Lawrence D. “Larry” Johnson, former chairman of the bank’s board of directors and Aaron Johnson’s father, was banned from participating “in any manner in the conduct of the affairs of any financial institution or organization.” The FDIC accused him of engaging in “unsound banking practices, breaches of fiduciary duties, and violation of law or regulation” that led to an “Order of Prohibition from Further Participation” Larry Johnson signed a stipulation and consent to the prohibition order in December 2022, but neither admitted nor denied the accusations. The FDIC claimed that between January and August 2018, Larry Johnson failed to “prudently or diligently carry out his oversight responsibilities” as a director of The Farmers Bank in Carnegie.
FDIC penalized 3 bank directors Lawrence D. Johnson was one of three directors of Farmers Bank in Carnegie penalized by the FDIC.
Aaron D. Johnson, son of Lawrence Johnson, previously was the president and CEO of Farmers Bank in Carnegie and was vice chairman of its board of directors.
In September 2019 Aaron Johnson entered into a consent decree with the FDIC. He was accused of engaging or participating in “violations, unsafe or unsound banking practices, and breaches of fiduciary duty as an institution-affiliated party” of the Carnegie bank.
For example, he caused the bank “to pay for numerous expenses that were charged to his personal credit card and which were for the personal benefit of himself or his family.”
Consequently, the bank “suffered financial loss or other damage” and Johnson “received financial gain or other benefit.” Those actions involved “personal dishonesty and demonstrated” Johnson’s “willful and continuing disregard for the safety or soundness” of the bank.
The FDIC barred Aaron Johnson, like his father, Larry, from participating “in any manner in the conduct of the affairs of any financial institution or agency…” The FDIC also imposed an administrative enforcement action in September 2022 against Tracy L. Robison, former chief financial officer and a former director of The Farmers Bank in Carnegie.
Between July 2017 and August 2018, the FDIC claimed, Robison “provided critically deficient oversight of senior management’s compliance with laws and regulations, insider abuse, conflicts of interest, poor internal controls, and weak credit underwriting and administration,” and “engaged in acts and omissions that resulted in multiple violations of law or regulation.”
Robison’s actions were “recklessly unsafe and unsound and were part of a pattern of misconduct.”
Without admitting or denying the allegations, Robison agreed to a $2,500 civil money penalty, the FDIC reported.
Tracy Robison is the sister of Melvin Lee Robison, a former doctor of osteopathy who borrowed more than $600,000 from Farmers Bank and is serving a federal prison sentence for operating a “pill mill” in Sayre.
Melvin Lee Robison, 70, pleaded guilty in October 2022 to aiding and abetting health care fraud as well as aiding and abetting distribution of controlled substances.
In his plea agreement, federal prosecutors dismissed 162 other felony charges against Robison. Those included five counts of distribution of controlled substances resulting in two deaths from acute oxycodone toxicity, two deaths from fentanyl toxicity, and the death from an acute combined drug toxicity of a patient who was prescribed morphine, oxycodone and diazepam.
While those 164 charges were pending in Oklahoma, Robison also was charged in 2021 in the Southern District of Florida with one count of conspiracy to pay healthcare kickbacks. He pleaded guilty in that case, too.
Robison was sentenced on Oct. 25, 2022, to four and a half years in federal prison, was fined $113,362, and was ordered to pay $112,384 in restitution to the Centers of Medicare & Medicaid Services.
Four months after Melvin Robison was indicted in Oklahoma City federal district court in October 2018, Farmers Bank of Carnegie lent Robison and his wife more than $608,000. The signatory on the documents was Aaron Johnson.
Same name but new operation “This is a totally different bank,” President Clint Stone told Southwest Ledger in 2023. “We have new directors and shareholders and we’ve recapitalized.” Farmers Bank is profitable now and has been for “the last few years,” he said on Feb. 6.
“We’re proud to be part of the community in Carnegie and in Oklahoma City,” Stone added.
“The Johnsons are behind us,” he said. “I wish that wasn’t part of our history, but it is.”