The saga of First National Bank of Keystone, W.Va., is growing stranger by the day.

When the Office of the Comptroller of the Currency abruptly shut down the $1.1 billion-asset bank on Sept. 1, claiming massive fraud, First National officials promised another side to the story. OCC examiners, they alleged, had it in for them.

"They closed that bank too soon," said Daniel T. Halsey, a First National director. "The smoke hasn't cleared."

Until this week, the bank's officers offered no proof to back up their charge against the regulators. But court documents made public Monday by a U.S. District Court judge in Bluefield, W.Va., could change that.

OCC officials questioned the legitimacy of the papers, which included printouts of electronic-mail messages allegedly written by OCC employees. "The authenticity of some of the documents is in question," an agency spokesman said. "We've referred the matter to the appropriate law enforcement agencies."

But a First National employee swore in court in July that he accidentally discovered the documents while pushing a cart of the OCC's things into the bank's vault. If authentic, the internal e-mails would spell trouble for the regulator.

"We have got the bank where we want it," read an e-mail allegedly sent by examiner-in-charge Doug Daugherty on Oct. 27, 1997, the day First National's long-time president, J. Knox McConnell, died. "We can finally win and put the No. 1 bank in the country out of our hair for good." The e-mail was allegedly sent to Kathy Gerardy, an OCC official here who helped supervise "problem" banks. Mr. Daugherty, now working for City National Bank of West Virginia, Charleston, did not return several phone calls Tuesday seeking comment.

Mr. Daugherty allegedly sent a similar e-mail the following day. "I guess I will miss fighting with the S.O.B.," it said of Mr. McConnell. "We have given them so many conflicting directions, I don't even know what is right anymore."

In a January 1998 journal entry, Mr. Daugherty allegedly described submitting a request for civil money penalties against six First National directors as punishment for call report errors. "They will be really p----- off at us," the entry read.

"If the truth be known," the journal continued, "we probably caused the majority of the call report errors by what we told them, and they know it. I am telling this so whoever is the lucky person to be assigned Keystone will be prepared."

Edward D. McDevitt, an attorney at the Charleston law firm of Bowles Rice McDavid Graff & Love who is representing First National chairman Billie J. Cherry and senior vice president Terry L. Church, said his clients were relieved. "We're pleased that the U.S. attorney asked to have the documents unsealed and that the other side of this story will start coming out," he said.

OCC officials have previously said First National has a history of fabricating documents. According to one agency official, bank employees doctored servicer reports for months to make it appear as if more than $500 million of loans the bank had sold were still in its portfolio.

Michael H. Graham, the First National accountant who swore he stumbled upon the internal OCC documents, has previously had his Certified Public Accountant certification stripped by both Virginia and West Virginia. In 1997, the West Virginia Board of Accountancy refused to reinstate his license because, it found, he had "forged or altered" certificates from an accounting school.

But law enforcement officials have yet to reach a conclusion about the authenticity of the OCC e-mails. On Sept. 28, in fact, OCC attorneys asked an administrative law judge to postpone a request for additional civil money penalties against First National's directors, pending completion of the federal investigation.

Louis Whiteman contributed to this story.

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