Small-town Nebraska former bank executive pleads guilty to bank fraud allegations

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LINCOLN — A 71-year-old former president of a small, rural Nebraska bank has pleaded guilty to bank fraud allegations and is to be sentenced in August.

Jack Poulsen of Ericson faces a maximum penalty of 30 years imprisonment and a fine of up to $1 million, announced Nebraska U.S. Attorney Susan Lehr.

Ericson State Bank was founded in 1959 and had its only location there. It was an insured member of the FDIC from 1960 until its closing in February 2020, according to a media release from Lehr’s office. Poulsen served as president from 2010 through September 2019. He also sat on the board of directors.

As president, Poulsen was responsible for overseeing the bank’s affairs and day-to-day operations and informing other board members of the institution’s financial condition. He had lending authority but was required to seek approval from the bank loan committee for loans exceeding $250,000. 

In addition, Poulsen was not to be the officer on loans for which he would have a personal conflict of interest, including those made to parties or entities related to him. 

But beginning in 2012, according to the federal probe, the bank began a lending relationship with an individual related to Poulsen. The individual and his business entity received “numerous loans and opened several accounts with the bank,” the news release said, adding that Poulsen was not supposed to be associated as a loan officer for those.

“Nevertheless, beginning at least in June of 2015, Poulsen began interfering with these insider-related loans and accounts for the purpose of hiding their unsoundness from the Board of Directors,” federal officials said in a media release Thursday.

The alleged actions included advancing bank funds for more than the approved loan amounts and manipulating computer data to conceal past-due status of loans. The actions continued, federal officials said, until Poulsen was removed from his bank positions in September 2019.

In one instance in 2019, Poulsen reportedly entered a new maturity date for one of the insider-related loans. “Due to this manipulation, the loan was not presented as past due to the Board of Directors despite the loan being mature for 181 days and drawn to a balance of approximately $1.6 million over the approved loan amount,” the media release said.

The case was investigated by the Federal Housing Financing Agency, Federal Deposit Insurance Corp., Federal Reserve Board and FBI.

Investigators said that Ericson State Bank “ultimately failed” and was placed into receivership with the FDIC. The bank had been a state-chartered financial institution regulated and examined by the Nebraska Department of Finance.

The investigators determined that a loss of more than $800,000 was attributable to the insider-related loans which they said were subject to the “scheme.”

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