WASHINGTON - Five former executives of the failed First National Bank of Keystone were sentenced this week to as much as 12 and a half years in prison for their cooperation in a plot to deceive bank regulators about the condition of the institution and to defraud the bank.
Michael G. Graham, the former head of Keystone Mortgage, was sentenced Monday in federal court in Bluefield, W.Va., to 12 and a half years after pleading guilty to bank fraud and money laundering. He was also ordered to pay back $515 million to the Federal Deposit Insurance Corp.
Mr. Graham is already serving a term of more than four years for his role in obstructing a bank examination. He is required to pay the FDIC $50 a month while he is in prison and $300 a month once he is released.
Melissa Quizenbeury, the former executive vice president of Keystone, was sentenced to eight months in the custody of the Bureau of Prisons after she pleaded guilty to insider trading. She is required to pay a $5,000 fine and to refund the $440,000 received from her trading. U.S. District Judge David A. Faber recommended that Ms. Quizenbeury serve her sentence in a half-way house in Virginia. She was also sentenced to two years of supervised release, with the first six months to be served under home confinement.
Barbara Nunn, Mr. Graham's secretary, was sentenced to five years probation and a $4,000 fine after pleading guilty to two counts of personal tax evasion. She will serve the first eight months of her probation under home confinement, which requires that she wear an electronic monitoring device.
Two other employees, Lora K. McKinney and Lorene Ellen Turpin, were sentenced to three years' probation and $3,000 and $5,000 fines, respectively, after pleading guilty to aiding and abetting obstruction of a bank exam.
A spokesman for the court said that all five of the executives had received substantially reduced sentences for their cooperation with prosecutors pursuing Terry L. Church, the former vice president of Keystone, and Billie Cherry, its former president and chief executive officer. He added that Ms. McKinney and Ms. Turpin were two of the original witnesses who revealed the plot.
Ms. Church and Ms. Cherry were convicted in October on counts that included money laundering, embezzlement, mail fraud, and conspiracy; they are scheduled to be sentenced Jan. 7. Keystone's collapse is estimated to cost the FDIC more than $750 million.
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