Prosecutors, FDIC split over Ephraim bank restitution

U.S. Attorney Paul Warner’s office asked a judge Friday to order a federal agency to identify victims of a failed Utah bank whose deposits exceeded the insurance limit of $100,000.

The Federal Deposit Insurance Corp. is refusing to provide Warner a list of the account holders who lost money at the Bank of Ephraim.

In court papers, the agency contends it alone deserves any restitution and is the only victim of the bank’s collapse, which was blamed on embezzlement and bad loans, including loans to polygamists along the Arizona border.

The Federal Deposit Insurance Corp. didn’t return a message left after business hours Friday by The Associated Press seeking a fuller explanation. The agency covered the losses of depositors only up to $100,000 per account, leaving other victims, who lost $4.8 million from 125 accounts.

Warner’s office says it wants a list of those victims so it can seek restitution from a bankinsider and associate accused of embezzling money from the Bank of Ephraim.

Randy K. McArthur, 50, who was the bank’s head cashier, and his friend Dean Johnson, 51, pleaded guilty in September to bank fraud. Court documents allege the pair took $5 million, an amount they dispute.

A judge will set the restitution amount when the two are sentenced Nov. 22 in federal court.

McArthur and Johnson are believed to have assets that can be taken to partly satisfy uninsured depositors, Warner spokeswoman Melodie Rydalch said Friday.

In court papers, assistant U.S. Attorney Elizabethanne Stevens said federal law requires prosecutors to seek restitution from the two men, but they can’t do that until the Federal Deposit Insurance Corp. cooperates.

State regulators have identified some of the uninsured depositors as Ephraim, Hildale and Snow College, which had deposits in the bank that exceeded the limits of FDIC insurance coverage by a combined $250,000.

The bank’s assets were taken over by Far West Bank ofProvo last June.

Prosecutors allege McArthur and his friend forged bank documents to cover up their embezzlement of funds over 15 years. They were accused of cashing official bank checks at other institutions, then altering Bank of Ephraim documents in an effort to show it wasn’t losing money.

Vacation? Short break? Day trip? Get Skip-the-line tickets at GetYourGuide.


(Listed if other than Religion News Blog, or if not shown above)
The Associated Press, USA
Oct. 23, 2004
Paul Foy

Religion News Blog posted this on Sunday October 24, 2004.
Last updated if a date shows here:


More About This Subject



Our website includes affiliate links, which means we get a small commission -- at no additional cost to you -- for each qualifying purpose. For instance, as an Amazon Associate, Religion News Blog earns from qualifying purchases. That is one reason why we can provide this research service free of charge.

Speaking of which: One way in which you can support us — at no additional cost to you — is by shopping at