# OKCpedia > Businesses & Employers >  Farmers Bank

## Pete

*OKC bank facing FDIC and legal scrutiny; high-profile banker ousted*

Less than a year after opening a branch in the Midtown area of Oklahoma City and reporting state-leading growth, Farmers Bank of Carnegie quietly removed its president after a bank examination resulted in a corrective order from Federal Deposit Insurance Corporation (FDIC) and Oklahoma State Banking Department.

In addition, the bank and its former CEO have been named as defendants in a new lawsuit containing serious allegations, while the bank itself has brought action against its former chief executive.




*Bold new image*
After decades of operating as a small community bank in Carnegie, Farmers opened a branch at 1300 N. Walker Ave. in April of last year, an unusual and high-style facility with custom ping-pong tables, electric scooters, a coffee bar and dcor more closely resembling a downtown loft than a traditional bank.

A full-page story featuring the bank's new CEO, Aaron D. Johnson, graced the front of _The Oklahoman's_ Sunday business section on May 27, 2018 and the same publication posted a video -- a 6-minute monologue delivered by Johnson seated at the new Farmers coffee bar, showcasing the expensive new Midtown bank offices and extolling his ambitious vision -- to its website.


_Aaron Johnson films a video feature for the Oklahoman_

Johnson was featured prominently in Farmers social media promotions and extensive marketing efforts, including a self-produced video of the bank president driving around Carnegie in an expensive Audi and flashing a gold Rolex watch.

Then suddenly on February 11, 2019, Farmers posted a short video to its Instagram account of Aaron Johnson introducing David Braly as the new president and CEO of the bank.  No details were given for the abrupt change or regarding Johnson's future.

*FDIC steps in*
A month later, on March 21, 2019, the FDIC formally disclosed a 25-page Consent Order demanding a long list of corrective actions, including specific restrictions and changes regarding properly qualified management personnel, board supervision, loan policy, reporting of charged-off loans, capital increase and a "realistic, comprehensive budget" as part of a larger profit plan.

The Consent Order included this as background: The Bank, by and through its duly elected and acting board of directors, has executed a 'Stipulation to the Issuance of a Consent Order' dated February 21, 2019 that is accepted by the FDIC and the State.  The announcement of the new bank president had been just 10 days prior to the signed stipulation.


_Johnson introducing Braly in a February 11, 2019 Instagram video_
The order indicates the corrective action was the result of a Report of Examination (ROE) dated September 17, 2018.  Per FDIC rules, ROE's are not a matter of public record.

According to Section 15.1 of the FDIC's Manual of Examination Policies, a Consent Order is a type of Cease and Desist Order against an insured bank when facts reasonably support that the bank has engaged in unsafe or unsound practices and/or if it has violated a law, rule or regulation.

The manual further explains that the purpose of such an order is to remedy unsafe or unsound practices or violations and to correct those conditions.

*Sudden rise, fast fall*
Aaron Johnson became the president and CEO of Farmers Bank at age 34, succeeding his father in that role and becoming the fourth generation of his family to helm the institution. 

Although the bank was based in 1,672-person Carnegie, Johnson lived in Oklahoma City dating back to 2006 when he took his first official role with Farmers.

County records show that starting in 2014, Farmers began to make a number of multi-million dollar loans for commercial and residential real estate projects, many signed by Johnson.  By September of 2015, Johnson was promoted to executive vice president and chief lending officer and in May of 2016, elevated to the role of CEO.

Dozens of large OKC-area loans followed and Farmers was soon lauded as the fastest growing bank in the entire state for 2017, nearly doubling the growth rates of the second-place finishers in terms of asset, loan and deposit growth and besting all of the state's other 200+ banks.

In 2017 alone, Farmers reported between 80.29 percent and 86.09 percent increases in all three categories, a remarkable feat for what had been a sleepy small-town bank.



By mid-2018 the examination had begun that led to the existing Consent Order.  By February 2019, Braly had been quietly introduced as the new head of Farmers and Johnson was no longer listed as an officer.

Public records reveal that new lending activity declined sharply after Johnson left the bank.

Quarterly reports filed with the FDIC show that after significant declines from 2011 to 2015, for the period between January 1, 2016 and December 31, 2018, Farmers grew its total assets, loans and deposits by 143.4 percent, 177.2 percent and 175.2 percent respectively.

Yet corresponding net income over the same period took a sharp downturn, culminating in a reported loss of $698,000 in 2018 after recording a bad loan allowance of over $1.2 million.   


*Bank files suit against former CEO*
Several months before Farmers replaced Aaron Johnson as its chief executive, the bank engaged an independent accounting firm to investigate staggering sums charged to an American Express card.

In a lawsuit filed last month, Farmers claims Johnson made personal charges in the amount of $398,389.49 in a twelve-month period beginning in June of 2017 and that the bank paid these charges on behalf of Johnson.

Although the suit indicates Johnson ultimately repaid $371,000, Farmers claims an unpaid balance of $47,948.13 with interest still accruing.

The bank also alleges that Johnson breached his fiduciary duty as chief executive officer by utilizing the card for personal use and having those charges paid by Farmers.

The FDIC's Consent Order contains over a full page devoted to new restrictions regarding expenses paid on behalf of employees and directors, including limitations on spending, complete documentation and proper and timely review.

In an answer to the filing, Johnson's attorney denies money is owed the bank or that it was damaged in any way by the American Express charges.

The matter is still pending in Oklahoma County District Court.

*Sued by shareholders*
In addition to the FDIC and state regulatory issues, two existing shareholders in Farmer Bank recently filed a legal claim alleging they had been fraudulently induced into lending money to Aaron Johnson and his father Lawrence.  The suit identifies the Johnsons as the majority shareholders of the bank.

The action filed by brothers Gary S. and Robert D. Smith asserts they were intentionally misled by Aaron Johnson when the pair loaned substantial sums to Farmers Bank, which is also named in the suit.  The Smiths claim $1.5 million in promissory notes were executed on July 24, 2018.

The filing states the original due date was extended at the request of the Johnsons after Aaron offered assurances of bank profitability and full payment in mid-March of this year.  The Smiths filed their lawsuit earlier this month after no payment was tendered.



The suit includes several additional allegations including: 1) bank regulators in early 2018 directed Farmers not to borrow funds without consent, which was not obtained in regard to the subject promissory notes; 2) the Johnsons had misused assets of the bank imperiling its ability to repay the notes; 3) the Johnsons defrauded the Smiths and others in conjunction with the sale of stock in Farmers; and 4) the fraudulent stock sales would be the subject of a separate lawsuit.

The Smiths are the principals behind Corsair Cattle Company, a real estate investment and development firm that has sold and renovated a great deal of property in and around the Midtown area of OKC.


Aaron Johnson and David Braly did not return our calls.

OKCTalk and _Oklahoma Gazette_ will continue to follow this story.

----------


## Eric

The moral of the story is don't trust executives with beards.

----------


## Zuplar

Speaking as an executive in banking, when the FDIC says what they did in this case, it's a bad deal. I'd have to imagine this was not the first time they were written up.

----------


## sooner88

They've been in trouble for awhile and their employees have been jumping at the first opportunity to get out of there. Aaron was incredibly flashy which typically goes against your stereotypical banker. Not that that means anything is wrong, but you're certainly going to draw attention when you're growing at such a high multiple. Spending that much personally on a company card is just careless and stupid.

----------


## Pete

The FDIC Consent Order was 25 full pages of mandated changes, which should tell you a lot.

They put on over $60M in new loans in just two years; more than tripling their loans in that time.  Some of those have already gone bad.

Now, their stockholders are suing them.


I'll let everyone draw their own conclusions and I'm sure this story will continue to play out for quite some time.

----------


## Bullbear

the whole transformation seemed slick and very used car salesman to me.  will be interesting to see how it all plays out for sure.

----------


## The Shadow

I live in the area and have been observing Mr. Johnson for quite some time. I seem to recall a Financing by Farmers Bank sign in from of the home at 524 NW 8th when it was being built.

----------


## Zuplar

I wonder if there are similarities as to what happened to Bank of Union. They had similar growth in a short time.

----------


## Zuplar

> The FDIC Consent Order was 25 full pages of mandated changes, which should tell you a lot.
> 
> They put on over $60M in new loans in just two years; more than tripling their loans in that time.  Some of those have already gone bad.
> 
> Now, their stockholders are suing them.
> 
> 
> I'll let everyone draw their own conclusions and I'm sure this story will continue to play out for quite some time.


Big time. I remember the concern we had when the FDIC gave us an MOU for literally one bad loan for a local guy who was renovating a large apartment complex in Norman who ended up skipping town. That meeting with the FDIC was intense and again we are talking about one loan, one page memorandum. The customer ended up screwing over multiple banks and after a big lawsuit we recouped most of our money. Still the FDIC was not very nice to us, and what I'm talking about pale in comparison to what is being talked about here.

----------


## PhiAlpha

> The FDIC Consent Order was 25 full pages of mandated changes, which should tell you a lot.
> 
> They put on over $60M in new loans in just two years; more than tripling their loans in that time.  Some of those have already gone bad.
> 
> Now, their stockholders are suing them.
> 
> 
> I'll let everyone draw their own conclusions and I'm sure this story will continue to play out for quite some time.


Its like a mini Penn Square

----------


## The Shadow

Remember TEEMCO? 

This Aaron Johnson guy sort of reminds me of a millennial version of Greg Lorsen, who also had a huge article in the Oklahoman about his business which sort of just popped up out of nowhere.

Very similar story.

----------


## Mott

The old saying, give a man a gun, and he can rob a bank, give him the bank and he can rob the world....

----------


## Pete

Front page -- and full page -- of the 5/27/18 Sunday Oklahoman business section.

----------


## chuck5815

Very interesting placement of the MidFirst ad. Seems to describe the situation perfectly. 

Maybe that was a low key warning to the depositors?

----------


## sooner88

Also interesting they run that article, but no word on the recent news...

----------


## Dob Hooligan

> Also interesting they run that article, but no word on the recent news...


Probably stiffed them on the last half payment on the article.

----------


## jonny d

> Also interesting they run that article, but no word on the recent news...


Probably because that article is 14 months old.

----------


## jedicurt

> Probably because that article is 14 months old.


man... if the Oklahoman ran news about 14 months in the future... then it would totally be worth the money!

----------


## sooner88

> Probably because that article is 14 months old.


I know....

My point being they run a fluff piece on a bank a year ago, yet when something major happens such as this the FDIC disclosing a 25-page Consent Order, something that is major news in the OKC business community, the Oklahoman is quiet.

----------


## Pete

https://oklahoman.com/article/563701...cused-of-fraud




> Former Farmers Bank president and CEO Aaron Johnson, left, talks with his father, Larry, at the coffee bar built in their new Midtown branch in this May 15, 2018, photo. A few months later, both men stepped down admid allegations of fraud and a consent order from the FDIC.


False.  As I documented, Aaron Johnson didn't leave his post until February of 2019.




> The consent order, published by the Federal Deposit Insurance Corp. on June 28,


False, it was issued on March 21st of this year.




> list of required actions to address alleged unsafe banking practices relating to loan procedures, management, expense reimbursement and pay and capital


This is highly misleading.  The order was 25 pages long and contained lots of mandated changes beyond what is listed here.




> Aaron Johnson, who took over as CEO in 2017 at age 34, was gone after little more than a year and just a few months after the opening of the Midtown branch.


Way false.  Johnson started as CEO in 2016 and didn't leave that position until February of 2019.  Branch opened in April 2018.




> records show Aaron Johnson stepped down as CEO of Farmers Bank


False.  There are not records that show this or that he stepped down.  Just a press release that Braly was the new CEO.  We don't know if he was fired, if the FDIC insisted he leave, etc.


Keep in mind all this happened months ago, apart from the 2 lawsuits; one was filed June 6th, the other July 7th.  The Oklahoman also put a very small notice about Braly being the new president in March (a reprint of a bank press release).  But they have nothing to say about any of this until I work for months putting it all together, then within a few days they put out a story with nothing new, apart from the "all is well" quotes from the new president, who will only talk to them now to do damage control after my story.  He did not return my call at all.  And then of course, they can't even get the basic timeline correct even though I did all the work for them.


This is a sad attempt to try and make it look like they are covering a story out of embarrassment of running a massive PR campaign for this bank while they were right in the middle of serious issues.  That whole story and video was orchestrated by a PR firm.

Sound familiar?

----------


## jonny d

> https://oklahoman.com/article/563701...cused-of-fraud
> 
> 
> 
> *False.  As I documented, Aaron Johnson didn't leave his post until February of 2019.*
> 
> 
> 
> False, it was issued on March 21st of this year.
> ...


This just sounds like semantics. The rest, I agree with you. But this just seems like semantics. The Oklahoman is covering its own butt here. But yeah, it is a bad deal for all involved with that bank, including the DOK, who gave them 2 pages or so of advertising a little over a year ago.

----------


## Pete

He left 9 months after that photo, not "a few months after".  

Not a huge deal but demonstrates the reporter doesn't even understand the timeline of events although I had already spelled it out in great detail.


Just so bad for our community in so many ways.

----------


## RustytheBailiff

"False. There are not records that show this or that he stepped down. Just a press release that Braly was the new CEO. We don't know if he was fired, if the FDIC insisted he leave, etc."

The First Order under the FDIC's Cease and Desist is that the bank shall have and retain qualified management strongly suggests that the FDIC was not amenable to the then current CEO -

----------


## Pete

> The First Order under the FDIC's Cease and Desist is that the bank shall have and retain qualified management strongly suggests that the FDIC was not amenable to the then current CEO -


Yes, but the records do not show he 'stepped down'.

That's a big distinction.

You can draw all types of inferences from the Consent Order but as a reporter you can't assert something as fact ("records show Aaron Johnson stepped down as CEO of Farmers Bank") when it isn't a fact.

If you take that leap, then you could also say "Records show the FDIC forced the bank to fire Johnson"; or "Farmers decided to fire Johnson to appease the FDIC".   Although those seem like the most plausible scenarios I didn't say that in my report because that's not what the records say and the records simply don't provide enough information.


It's sloppy reporting on the part of the Oklahoman, plain and simple.  You think they could at least get things straight when they are ripping off someone else's work without proper attribution.

----------


## Timshel

I'm hardly one to defend the Oklahoman or the bank, but some questions based on your assertions.  

How are you certain the Oklahoman doesn't have records that you aren't privy to? 

How are you certain the Oklahoman is ripping off your work? Does the fact that "the reporter doesn't even understand the timeline of events although I had already spelled it out in great detail" suggest that maybe they weren't ripping off your work? 

Also, are you certain that, at the Oklahoman, the reporter writes the captions for the photos (real question - don't know the answer)? Seems like this could easily be poor editorial work rather than poor reporting - which still isn't great - but given the specific dig made at Steve here seems to be a relevant distinction. 

While saying "a few months later" is misleading, it's not false. And, at least to me, saying it was "admid allegations of fraud and a consent order with the FDIC" gives context to the timing. 

Also, hardly a substantive point, but issue date and publish date are two different things. Neither you nor the Oklahoman made a false statement - just referring to two different things.

----------


## Pete

> Also, hardly a substantive point, but issue date and publish date are two different things. Neither you nor the Oklahoman made a false statement - just referring to two different things.


The Consent Order was issued and published on March 21st.  The FDIC uploaded it to their site and issued a press release.  The order is signed and dated.  I have all this documented, I'm not just talking out of my arse.

And if the Oklahoman has records I'm not privy to, they should be cited in the article and they only mention things I had already specifically referenced.  Considering they mention absolutely no new info in their article, I think it's safe to assume they didn't find anything new on their own.  In fact, I can't even think of what 'record' would mention this and use that wording.


As how I am certain they are ripping off my work, they've been doing it for years.  It's not a coincidence that they publish this story 2 days after mine while the most important information was in the public domain for months.  Steve Lackmeyer admitted to this practice himself on OKCTalk when I called him out on it (concerning one of many other examples).

I have lots more info I'm not going to share; at least not yet.

I've worked on this since February.  They clearly slapped together a quick story as soon as my article came out.  That should be obvious and I'm not going to cite all the dozens of similar examples.

It is also standard journalism practice to cite when you 'follow' a news story by writing one of your own.  You see this all the time in respectable news outlets and I've interviewed multiple journalism ethics experts who say it's clearly understood that when your report is completely prompted by the work of another, you cite them and give them credit.  Something we do every single day here.

----------


## TheTravellers

> ...
> 
> Also, are you certain that, at the Oklahoman, the reporter writes the captions for the photos (real question - don't know the answer)? Seems like this could easily be poor editorial work rather than poor reporting - which still isn't great - but given the specific dig made at Steve here seems to be a relevant distinction. ...


At all the papers my wife has worked for as a copy editor, the reporters never wrote photo captions, including the Oklahoman way back when she was there.

----------


## Timshel

From the June 28, 2019 press release (https://www.fdic.gov/news/news/press...pr19058.html):

_FOR IMMEDIATE RELEASE
June 28, 2019_ Media contact:
David Barr
(202) 898-6992
dbarr@fdic.gov
The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of administrative enforcement actions taken against banks and individuals in May. There are no administrative hearings scheduled for July 2019.

The FDIC issued a total of 11 orders in May 2019, and_ is publishing one issued in March 2019 . . . ._ (Emphasis added.)

https://www.fdic.gov/news/news/press/2019/

The only March 21, 2019 Press Release currently on the FDIC's website is titled "FDIC Announces Meeting of Advisory Committee on Community Banking" and does not discuss the Consent Order. I suppose there could have been one that was subsequently removed, but I doubt it. And FWIW, the FDIC's press release announcing the March Enforcement Decisions and Orders, which is typically where it would have been published (April 26, 2019) does not include the Consent Order. 

As to your other points, fair enough and I don't necessarily think you're completely wrong. Just pointing out the difference between an assumption/assertion and a proven fact. If you're able to provide evidence that it's the latter (e.g., that the Oklahoman's story was "completely prompted" by your work), I'm all ears, but until then it will remain in the former category for me. And I hope you don't take that personally, as I truly appreciate all the work you're doing and acting as a check on the Oklahoman. Similarly, I hope you appreciate when me and others question the basis for information presented here as fact/truth/falsehood/etc., especially assertions that cannot easily be proven and that are potentially damaging to others' reputations/careers/etc. 

Here, I wouldn't be shocked at all if the Oklahoman saw/used/etc. your post here, but at the same time, I don't think anyone would question the newsworthiness of this story so no one can be surprised that the Oklahoman would cover it or that they were not/did not become aware of this story through other means. And given the nature of this story, the information presented was destined to be similar, even if they did all of their own reporting (though the Oklahoman managed to bungle even some of this).

----------


## Pete

> Here, I wouldn't be shocked at all if the Oklahoman saw/used/etc. your post here, but at the same time, I don't think anyone would question the newsworthiness of this story so no one can be surprised that the Oklahoman would cover it or that they were not/did not become aware of this story through other means. And given the nature of this story, the information presented was destined to be similar, even if they did all of their own reporting (though the Oklahoman managed to bungle even some of this).


Understand this is not something this is open to debate among journalists.

Which is why you see "as first reported by" millions of times in the press, even when they do their own reporting in some form.


I apologize for being prickly about this but it's a huge hot button.  Imagine that you work for months on something then someone (appears to) swoop in and copy your work after you've already provided all the answers.  As I said, the reporter in question has admitted to this practice.

I will also say that it's a false assumption that the Oklahoman would have covered this story (and many others) if not for our work.

----------


## The Shadow

Pete, I think you're right on the time line. Back in Jan, Farmers had a table at OKC Fight Night and Aaron was there. Their table was right next to Keystone energy which also is in todays business section. Thats the lease broker that conspired to defraud Sandridge out of money. Oh wow! the paper fails to mention the name of the company in the article. Gee, imagine that. And yes that's the same member of the Kerr family who has been in trouble with johnny law in the past.

----------


## Pete

There is much more to come on this story.

I suppose it's just another huge coincidence the Oklahoman only covered what I had already written about, even though there are lots more related people and issues.


This is very similar to TEEMCO.  They only did stories after we continued to write our series.  And almost all of it was just quotes from their now-incarcerated CEO (which they printed, even though most of it completely contradicted research I had already done and printed) and when his sentence was handed down, I was literally the only observer in the courtroom and the Oklahoman printed a nothing story they lifted directly from a court press release.

----------


## PhiAlpha

> There is much more to come on this story.
> 
> I suppose it's just another huge coincidence the Oklahoman only covered what I had already written about, even though there are lots more related people and issues.
> 
> 
> This is very similar to TEEMCO.  They only did stories after we continued to write our series.  And almost all of it was just quotes from their now-incarcerated CEO (which they printed, even though most of it completely contradicted research I had already done and printed) and when his sentence was handed down, I was literally the only observer in the courtroom and the Oklahoman printed a nothing story they lifted directly from a court press release.


You should do a big piece on the crappy journalism coming out of the Oklahoman. It really is turning into even more of a joke than it already was outside of the sports section and no one else in the state is even talking about it.

----------


## Pete

I've been outlining a piece called "OKC is a great place for a scam" for quite a while.

It was actually a quote from a local lawyer who knew a bit about the TEEMCO scandal as I was covering that story.  He said it in such a casual and accepting way, it was burned into my brain.

And he is 100% right.  All it takes is hiring a PR firm (or paying them to write content) and the Oklahoman will gladly not only publish anyone's propaganda, they'll give them the front page of the Sunday business section and upload a 6-minute video where they are allowed to just say whatever they want to say, without even being interrupted by a single question.

The Journal Record is just as bad.  They gave TEEMCO a freaking award for nonprofit work and never even bothered to do a simple search to verify that it even had a 501(c)3 charity -- which it didn't.  The JR also took the PR bait on Farmers (the Gazette declined, BTW).

The Oklahoman accepted payment for content for EPIC Charter Schools and gave their leader -- yes, the one accused of embezzling $5M of state education funds -- a leadership award.


There is also a very odd culture in OKC where if you aren't being a blind cheerleader for everything all the time, it makes people very uncomfortable and in extreme cases you'll even have people turn on you.


All of this holds OKC back.  We still operate like a small town even though we like to pretend we are a Big League City.  That crap needs to change.  The problem is that the power is still held by those who claim to want change and the best for the community, but are really just trying to protect their semi-monopolistic turf.  And the Oklahoman is at the front of that line.

----------


## Pete

Here is the bank celebrating a small sample of their rosy PR-driven press:

----------


## knownothing

Aaron's father, Larry Johnson quietly "retired" from the bank's Carnegie office about a month ago. This article/advertisement appeared in the Carnegie newspaper to explain it.

----------


## Pete

By all accounts, Larry is a good man who did a lot of good for Carnegie.  Same for his father Don.

I'm sure the FDIC forced the bank to remove Larry from the board, which should tell you a lot about the mess Aaron created in a very short period of time.

I have great sympathy for the people in that small town who have relied on that bank for decades.

----------


## hoya

The thing that bothers me the most is that he won't button up his shirt.

----------


## Dob Hooligan

Number 1 rule of banking: If you too wild with your clothing, you're too wild with customer money.

----------


## The Shadow

That beard though...LOL

----------


## HOT ROD

> ......
> 
> ...   ....
> 
> It is also standard journalism practice to cite when you 'follow' a news story by writing one of your own.  You see this all the time in respectable news outlets and I've interviewed multiple journalism ethics experts who say it's clearly understood that when your report is completely prompted by the work of another, you cite them and give them credit.  Something we do every single day here.


It almost seems as if Steve and/or the Oklahoman does not view Pete, OKC TALK, and the Gazette as real media or journalists. Yet Pete and his team often are the main journalists in the city that provide information beyond a 2 sentence quote or presupposition that we often find in the Oklahoman. I used to ask often why the Oklahoman would write such short stories all the time publishing them as articles, when there would be no info (such as an address, or a website, or more background/details) on a particular subject other than someone's opinion that WE NEED TO ACCEPT SINCE IT WAS IN THE PAPER. Or they 'might' mention events happening in town on the day of, no advanced notice.

Now, you can't make any suggestions and they have their paywall - so much for constructive criticism ....

We on here all know Pete had been screwed by Steve and the Oklahoman, because Pete dives in and reports whereas Steve (probably Oklahoman's best and best known reporter - bless his heart) publishes only the surface and far to often in my opinion writes about how far OKC has come since the 1990s in EVERY STORY!! Get over it, its 2019 now can we just get some articles without going back to the dark days? 

I wish they'd write articles with facts and back up editorials with facts, and stop writing every article like its a term paper or novel. Who, what, when, where, why, and how is the best journalistic approach in my opinion, with relevant background to tie everything which is exactly what we get with Pete/OKCT/Gazette, and not always the bombing, boomer everything (tramel), or Maps this and that - just very small time, small town.

maybe one day soon Pete's Oklahoma Gazette can be OKC's major metro newspaper since the Oklahoman has given up and seems to be more 'alternative' to the conservative?

----------


## HOT ROD

I will say that the Oklahoman did hire a couple of good new reporters recently, in addition to the female who writes about events/concerts in town - a huge step forward. 

In all honesty - I'd keep these new folks and fire/ask the others (and editors) to retire, then the Oklahoman probably wont have as much trouble staying in the black. ...

----------


## HOT ROD

> You should do a big piece on the crappy journalism coming out of the Oklahoman. It really is turning into even more of a joke than it already was outside of the sports section and no one else in the state is even talking about it.


HERE, HERE!!!!

I wonder what the Tulsa World would have to say as well. ... lol.

----------


## Pete

*Legal woes mount for Farmers Bank*

As we were *first to report* after a six-month investigation, shortly after opening a high-profile branch in the Midtown district of Oklahoma City, Farmers Bank of Carnegie found itself entangled in various regulatory and legal problems that continue to advance.


_The Midtown branch of Farmers Bank features a gold 'money tree' and a coffee bar_

*Claims of fraud*
A new lawsuit has been filed by three bank shareholders claiming they were fraudulently induced into investing by former CEO Aaron Johnson, who had been elevated to that post in 2016 at age 34.

After being the focus of expansive bank marketing efforts, Johnson was abruptly replaced as president in February but prior to his departure, the suit claims he facilitated a stock sale while withholding key information from investors R.D. Smith, Greg Smith and Derrick Ott, all of Oklahoma City.

The three plaintiffs purchased a combined 1,089 shares between 12/22/17 and 11/5/18, largely from Larry Johnson, Aaron's father and then-chairman of the bank holding company.

The lawsuit claims Aaron failed to disclose the bank had been operating “in an unsafe and unsound manner” and that regulators had been critical of the Johnsons' actions and had taken supervisory actions that were not adequately followed.

OKCTalk has learned from sources that starting in 2012, the institution had been operating under administrative orders from the FDIC that outlined numerous issues with demands for corrective action.  The orders were the result of regular examinations.

As we previously reported, the bank is currently subject to a lengthy consent order made public by the FDIC earlier this year.  Similar to bank examination documents, administrative orders are not routinely made public.



_Shareholders claim fraud in a suit filed against the bank and former officers_

The suit also claims all bank stock had been previously pledged in a loan to First State Bank, Anadarko, another material fact that was not disclosed to the plaintiffs.

The Smiths and Ott assert that had they been aware of this information they would have not bought stock in the bank and are therefore seeking millions in damages from the bank holding company, Aaron and Larry Johnson and former bank chief financial officer (CFO) Tracy Robison who sold her stock holdings to R.D. Smith.

In a separate legal filing, the Smiths are demanding payment of over $1.5 million they claim is owed to them by the Johnsons and the bank based on promissory notes issued in July 2018.  On Friday a summary judgment for the full amount owed by the bank was ordered by the judge in the case.


*Ex-CEO's bill increases*
As a part of an on-going lawsuit, Farmers Bank recently increased the amount it says is owed by Aaron Johnson for personal charges he made on an American Express card and had the bank pay on his behalf.

In the initial filing, the bank claimed that in just one year Johnson had charged $398,389.49 to the bank and still owed a balance of  $47,948.13.

The claim was recently revised to add $35,504.30 for the cost of the audit that revealed the personal charges, a $5,000 cash out ticket drawn from the bank and $48,604.60 in audiovisual equipment for Johnson's home that had been charged to Farmers.


_Former bank president Aaron Johnson_

In addition to claims of breach of fiduciary duty of care, breach of duty to act in good faith and conversion of bank funds for personal use, the total amount the bank is now seeking from Johnson is $137,057.03.


*Loan to indicted doctor goes bad*
In June of 2018, Melvin Lee Robison, D.O. was indicted by a federal grand jury on charges related to what the government alleges as an opioid “pill mill” in Sayre, Oklahoma.

The charges claim that Dr. Robison owned a medical practice that employed Moheb Hallaba, M.D. and that in a period between September 2015 and April 2017, the two physicians signed hundreds of prescriptions per week without reviewing patient files or seeing patients.

Robison and Hallaba were charged with 54 counts of distributing controlled substances outside the usual course of professional medical practice and without legitimate medical purpose.  Robison is also charged with 51 counts for fraudulent Medicare billing.

According to the indictment, the criminal distribution of these drugs resulted in five patient deaths.  If convicted of all charges, Robison would face a sentence of not less than 20 years and up to life.


_Prosecutors announce indictment of Dr. Melvin Robison_

On October 31, 2018 – just four months after the indictments and following over $128,000 in overdrafts – Farmers loaned Dr. Robison and his wife over $615,000; Aaron Johnson signed the documents on behalf of the bank.

In addition, Farmers had loaned Robison nearly $1.2 million in June 2017 even though a year earlier Oklahoma State Board of Osteopathic Examiners had officially restricted Robison's license to practice medicine so he could no longer write prescriptions for controlled drugs.

On July 9th of this year, the bank filed a claim against the Robisons for nonpayment of the October 2018 notes.

Melvin Robison is the brother of Tracy Robison who at the time of the loans was the CFO for Farmers, hired into that role by Aaron Johnson.  Tracy Robison left the bank not long after Johnson was replaced as chief executive.


*New leader already gone*
In February, the same month the board of the bank's holding company signed a 25-page consent order outlining mandated changes by the FDIC, Farmers brought in David Braly as the new bank president.

In an interview with _The Oklahoman_, Braly stated that although the Johnsons owned controlling interest in the stock "they have no influence over the bank whatsoever".

Braly went on to say the bank has brought on experienced and independent directors and that the previous management had kept the board in the dark about many issues.

Addressing the issues outlined in the consent order is ongoing, Braly said.

However, after suffering a loss of $698,000 for 2018, Farmers recently reported numbers that show an additional loss of $500,000 through June 30th of this year.

A call placed to Farmers Bank in Midtown confirmed that Braly is no longer with the bank.

----------


## The Shadow

"The suit also claims all bank stock had been previously pledged in a loan to First State Bank, Anadarko, another material fact that was not disclosed to the plaintiffs." Oh really?

But the thing about the pill mill and the CFO, yikes!

Excellent reporting btw  :Big Grin:

----------


## Pete

Just updated the story to reflect that the new bank president, David Braly, is no longer with the bank.

My understanding is he resigned.

----------


## Easy180

I’m just surprised a bank can be ran this way with the millions of bank regulations out there. That pic of the 34 year old ex-CEO tells me all I need to know.

----------


## Pete

> I’m just surprised a bank can be ran this way with the millions of bank regulations out there. That pic of the 34 year old ex-CEO tells me all I need to know.


Much more to come.

----------


## The Shadow

Interesting note, Dr. Moheb Hallaba was 89 years old at the time the charges were filed.

----------


## Pete

> Interesting note, Dr. Moheb Hallaba was 89 years old at the time the charges were filed.


Yes, if you read through the full indictment it's pretty obvious he was brought in specifically to write prescriptions as Dr. Robison was in the process of having that part of his medical practice revoked.

Keep in mind both doctors were indicted by a grand jury.  Such cases have incredibly high conviction rates and in this situation, there are very high financial penalties being sought by the federal government.

Not exactly a good loan candidate and of course, the most recent loan promptly goes bad and the bank still holds another $1.2M note from Robison.

----------

