Just more than a year after the failure and sudden closure of the First National Bank of Lindsay left the community reeling, a federal grand jury indicted former President and CEO Danny Seibel on several fraud charges Wednesday.
Seibel, 54, faces a total of 18 charges: one count of conspiring to commit bank fraud, five counts of bank fraud, 10 counts of false bank entries, one count of obstructing the examination of a financial institution and one count of failing to maintain an anti-money laundering program. One day after the grand jury filed the indictment (embedded below), the office of Robert Troester, U.S. attorney for the Western District of Oklahoma, issued a press release.
“As alleged, Seibel caused the bank to issue loans to certain customers, many of whom were his personal friends and neighbors, that the borrowers never repaid,” the press release stated. “It is alleged that Seibel then manipulated the bank’s records and falsified various bank reports to falsely overstate the performance of the loans, including by using new loans or transfers of the bank’s own funds to cover overdrafts of outstanding loans.”
Seibel also is accused of modifying his bank’s records to conceal illegal activity from both the bank’s board of directors and the bank’s federal regulator, the U.S. Office of the Comptroller of Currency. Over his 31-year tenure, Seibel was the bank’s chief financial officer and “bank secrecy act officer,” and the indictment alleges he failed in the latter role.
“For example, Seibel allegedly failed to file any suspicious activity reports on his own fraudulent scheme, and he advised bank customers to make cash deposits below $10,000 to avoid relevant reporting requirements,” the release said.
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The federal OCC forced First National Bank of Lindsay to close Oct. 18, 2024. The bank had been in operation for more than 100 years before its failure. The OCC named the Federal Deposit Insurance Corporation as its receiver — meaning the FDIC took control of the institution’s operations. The FDIC covers depositors up to $250,000, and a press release from the FDIC at the time identified $43 million of insured deposits. An additional $7.1 million went uninsured, and the FDIC said about 50 percent of those funds would also be recoverable to depositors, with perhaps more funds becoming available as the FDIC sold the bank’s assets. The First Bank and Trust Co. in Duncan assumed the insured deposits and began serving the failed bank’s customers.
According to the criminal indictment, Seibel was placed on leave Sept. 12, 2024, and was terminated eight days later, about one month before the bank’s failure. The bank’s vice president, Clint Simonton, died by suicide Sept. 27. A husband and father, Simonton’s obituary said he “was not without his faults, but was so quick to apologize, and to forgive.” Simonton is not mentioned in the indictment against Seibel.
‘Frequent’ gambling referenced in charges, civil suit
The alleged conspiracy run by Seibel served to “enrich certain FNBL borrowers,” according to the indictment.
“Seibel issued loans to certain FNBL borrowers — many of whom were his personal friends and neighbors — that the borrowers either never repaid or for which Seibel never recorded any payments,” the indictment said. “Some borrowers were unaware that Seibel was failing to record their loans, posting fake loans to their accounts, or making false entries in FNBL records about their loans and accounts.”
Not every borrower was unaware, however. The indictment alleges individuals identified as Borrower 1 and Borrower 2 were privy to Seibel’s scheme. Borrower 1 is described as the owner of a trucking company who maintained a business checking account at the bank. Borrower 2 “owned several automotive businesses in and around the Lindsay area, as well as a company that purportedly sold signs and T-shirts.”
Identified as having an FNBL business checking account in the name of a car business he owned, Borrower 2 was described as a “frequent gambler” and a “friend” of Seibel’s.
“Some of the borrowers to whom Seibel issued FNBL proceeds, including Borrowers 1 and 2, were aware of Seibel’s manipulative tactics and the financial benefits they derived from these tactics,” the indictment said. “On several occasions, Borrowers 1 and 2 texted Seibel asking him to ‘fix’ or add funds to their overdrawn accounts by manually adding FNBL funds to their accounts when they needed money.”
The indictment notes that, on March 29, 2023, Borrower 2’s account was overdrawn by more than $372,000.
“The following day, Seibel created a new loan in the amount of $400,000 — loan number 31137 — to cover the overdraft. Approximately three months later, on or about July 5, 2023, Seibel reassigned loan 31137 to a business associated with Borrower 3, without notifying Borrower 3 or others associated with that business,” the indictment said. “Seibel then made multiple changes to the loan’s maturity date, pay date, and other information throughout 2023 and 2024. These changes made loan 31137 appear healthy, despite only one payment of approximately $6,400 ever being recorded for this putative $400,000 loan.”
In the indictment, Borrower 3 was identified as the owner of an HVAC company “that often served marijuana grow houses,” and he was also described as a friend of Seibel’s. The indictment does not allege Borrower 3 was aware of Seibel’s scheme.
However, the indictment references Borrower 2 making withdrawals at Riverwind Casino, and it includes multiple references to Seibel allegedly asking Borrower 2 to arrange hotel rooms for him at casinos.
“On or about July 5, 2023, Seibel texted Borrower 2 and asked Borrower 2: ‘Any pull to get us a nice room at Riverwind [Casino] Saturday night? Or somewhere else close by? Tried Artesian [Casino] but booked up[.]’ Borrower 2 responded the following day: ‘You’re completely set up for Saturday night under your name,'” the indictment said. “On or about Aug. 31, 2023, Seibel again texted Borrower 2 and asked Borrower 2 whether he could book him a room at the Riverwind Casino. Borrower 2 replied that he had reserved Seibel a ‘[j]unior suite.’ Seibel responded: ‘No shit?! Awesome. Thanks man.'”
The indictment also details Seibel’s messages with Borrower 1, for whom he also backfilled an account with overdrafts exceeding $530,000.
“On or about March 7, 2024, Borrower 1 texted Seibel and again asked him to ‘fix’ his account. Seibel responded, ‘You bring me deposits tomorrow. I am finally totally tapped. Way too far OD. You need to go factor and cover this overdraft . . . . Hey I’m over $500k. I’m tired of taking care of your business and get no damn deposits. I have legal lending limits and overdrafts are part of it. I’m sorry my job ain’t worth it,'” the indictment said. “On or about March 28, 2024, the Borrower 1 xx2071 Account had a negative balance of $533,598.54. The following day, Seibel manually added $536,850.00 to the account, clearing the overdraft, when no such deposit had actually been made.”
Seibel is also accused of improperly issuing loans by “falsely stating” the purpose for them.
“On several occasions, Seibel disbursed loans to Borrowers 1 and 2 purportedly to purchase or improve real estate, vehicles or equipment. The proceeds were instead used to repay portions of other loans, gamble or pay day-to-day expenses,” the indictment said.
The indictment also details how Seibel allegedly gave federal regulators false bank records in September 2024 when they visited the bank.
“After Seibel learned that the OCC had obtained an unaltered copy of the Daily Maintenance Report for June 27, 2024, he texted another bank employee, ‘I think I’m nailed to the wall now I [g]ave them a report that [is not] the same as what they got now and they have both. Nobody’s fault but my own. Also, delete these texts,'” the indictment stated.
Danny Seibel: ‘I truly wanted to help the Lindsay community’
Last year, the bank’s former primary stakeholder, Jack Justice, filed a lawsuit against Seibel and his wife, Debra, for fraud and civil conspiracy. In his response, Seibel seemed to admit culpability.
“I, Danny, solely took actions that went against my fiduciary responsibilities to the board of directors of the First National Bank of Lindsay, and its customers,” Seibel wrote. “Those actions were wrongly taken out of deep internal fear for my job and position within the community. I truly believed I could eventually correct these actions with minimal loss to the bank. I truly wanted to help the Lindsay community and believed in certain customers, now knowing that belief was a mistake.”
He denied his wife had anything to do with his malfeasance.
“Debra had no knowledge of any of the stated allegations put forth, she had no part in any of the allegations,” he wrote.
Justice dismissed the lawsuit without prejudice in February, pending the outcome of a federal investigation.
“Mr. Justice has been requested by the FDIC to dismiss this case as the FDIC will review and determine what it believes should be prosecuted,” the dismissal said. “Mr. Justice reserves all rights, as he has been severely damaged by the defendants.”
Seibel’s Facebook page details some of his personal thoughts and activities in recent years. In 2021, he and his wife completed a “cabana” project with an above-ground pool at their home. And in several posts over the last five years, Seibel lambasted “Democrats” and President Joe Biden’s administration for economic issues and “liberal policies.”
“Watching a favorite show from a few years ago and it made me think about today,” Seibel posted Aug. 15, 2024. “Democrats and the left want men homo pacificus.”
The FDIC, FBI, IRS and Federal Housing Finance Agency are still investigating Seibel. Western District of Oklahoma Assistant U.S. Attorneys Julia E. Barry and Jackson D. Eldridge will prosecute the case, according to the press release.
If convicted, Seibel faces up to 30 years in prison and a fine of up to $1 million. The First National Bank of Lindsay’s failure was only one of two bank failures in the U.S. last year.
Read the indictment against Danny Seibel
