WASHINGTON - Federal regulators banned two former bankers from the industry and agreed on penalties and restitution totaling nearly $1.5 million.

The Office of the Comptroller of the Currency said last week that it settled a November 1998 complaint against Richard O. Wheeler and Tom N. Bransford, former officers of $44 million-asset Western American National Bank in Bedford, Tex.

The agency's complaint accused Mr. Wheeler, the bank's former chairman and controlling shareholder, of having the bank buy loan pools from companies he owned, then charging the bank "excessive fees and illegal mark-ups." Mr. Bransford, Western American's former president and chief executive officer, was accused of aiding Mr. Wheeler, but not of sharing the proceeds.

For example, the OCC said, in 1997 Western American allegedly paid hundreds of thousands of dollars to Consumer Loan Portfolios Inc. for brokering loan sales to the bank, but never told Western's board of directors that the company - owned by Mr. Wheeler - would play a role in the transactions.

By the time Western American was sold to First Baird Bancshares of Baird, Tex., in August 1998, the bank was critically undercapitalized, said Joe E. Sharp, First Baird's chairman. Mr. Sharp said his company injected $5 million of capital into the bank and that it is now well capitalized.

The two ex-officials did not admit or deny wrongdoing. Mr. Wheeler agreed to pay the bank restitution of $1 million and a $150,000 civil penalty. Mr. Bransford agreed to pay restitution of $250,000 and a $50,000 civil penalty.

- Scott Barancik

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