Two senior executives of the failed First National Bank of Keystone, W.Va., were jailed after Federal Bureau of Investigation agents discovered heaps of buried bank documents that the pair allegedly hid from regulators.

Charging conspiracy to obstruct an Office of the Comptroller of the Currency examination, the U.S. attorney's office in Charleston, W.Va., on Friday ordered the arrests of Terry L. Church, the bank's senior vice president and president of its mortgage subsidiary, and Michael H. Graham, executive vice president of the mortgage company.

The arrests were the first stemming from the failure of $1.1 billion-asset First National. Once heralded as one of the most profitable banks, it was closed Sept. 1 after examiners found that $515 million of assets it claimed to own had actually been sold. The missing funds have not been found.

At a hearing scheduled for this morning, the U.S. attorney plans to ask that Mr. Graham and Ms. Church be denied bail while the government's investigation continues.

The weeks since the closing have produced an abundance of rumors and finger-pointing among bank officials and their regulators.

Noticeably absent from the criminal complaint was the name of Billie J. Cherry, the bank's chairman. Her testimony to a grand jury investigating the bank's failure was postponed last month and has not been rescheduled. Calls to Ms. Cherry, Ms. Church, and Mr. Graham or their lawyers were not returned Monday.

In an affidavit filed Friday, FBI agent Robert B. Selbe said the OCC first discovered bank documents were missing during an exam this summer. Some of the files -- about 22 boxes, 27 folders, and five notebooks -- were found in Ms. Church's house the day after the bank was closed. But most remained missing until last week, when FBI agents found them buried in a trench 100 feet long and 10 feet deep on Ms. Church's mountaintop ranch.

Mr. Selbe said two unnamed sources led agents to the site. One, a former bank employee, told investigators that in July she provided Mr. Graham and several associates access to bank documents locked in a building across the street from bank headquarters.

The unnamed employee said she watched as the men dropped a large number of files from a third-story window onto a flatbed truck owned by Ms. Church's husband, a construction contractor.

The FBI also interviewed the driver of the truck, who said he was instructed to dig the trench and then haul and bury three truckloads of files. Investigators uncovered the documents, which included ledger printouts and microfilm of bank transactions, last Thursday.

If convicted, Ms. Church and Mr. Graham could face up to five years in prison and $250,000 in fines, according to law enforcement officials.

The arrests would seem to support the OCC's contention that First National officials made it impossible for regulators to detect the alleged fraud sooner.

Rep. Jim Leach, R-Iowa, the House Banking Committee chairman, has asked the OCC to explain First National's failure. Comptroller John D. Hawke Jr., in an Oct. 12 response, said bank officials made it tough for examiners to do their jobs. "There were several apparent attempts to deliberately deceive the examiners and to alter bank records," Mr. Hawke said.

Mr. Hawke said bank officers were hostile towards his examiners, secretly videotaping them and hiring armed guards as "protection" against examiners. One exam was postponed after OCC officials arriving at the bank found profane and threatening graffiti sprayed on the sidewalk outside. Fearing for their safety, the examiners sent for U.S. marshals to accompany them into the bank.

"In the face of the kind of intimidation and obstruction that the Keystone examiners faced, together with the massive falsifications of documents as was the case with Keystone, fraud detection becomes exceedingly difficult," Mr. Hawke said.

The regulators are not the only ones who claim they were deceived. Three credit unions that placed brokered deposits with the defunct bank have sued to recover some of what they lost.

The suit, filed Oct. 4, accuses seven former First National officers and directors of misleading depositors about the bank's financial condition. The credit unions -- $277 million-asset Grand Rapids (Mich.) Teachers' Credit Union, $118 million-asset St. Louis Postal Credit Union, and $102 million-asset Chetco Federal Credit Union of Harbor, Ore. -- held certificates of deposit worth $1.4 million, some of which was insured.

The list of plaintiffs could grow. The lawyer representing the credit unions said he intends to seek class-action status to enable other depositors to join the suit.

Scott Barancik contributed to this article.

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