Former President and CEO of Failed Oklahoma Bank Pleads Guilty to Bank Fraud

William (Beau) G. Grotzinger, the former president and chief executive officer of First State Bank of Elmore City, pleaded guilty May 11, 2026, in federal court in Oklahoma City to one count of bank fraud.

The bank, a small community institution based in Elmore City, Oklahoma, failed in March 2018. Federal regulators determined the collapse cost the FDIC Deposit Insurance Fund $11.3 million. Grotzinger’s plea resolves allegations that he directed the bank to make loans to borrowers who used portions of the proceeds to repay other loans at the same institution, concealing the true financial condition of those borrowers and the bank.

The scope of the fraud centered on a series of nominee loans and improper lending practices that masked deteriorating asset quality at the institution. The Department of Justice has not released a precise count of affected loans or borrowers in its announcement of the plea.

The FDIC, as receiver, assumed control of the bank’s deposits and assets following the closure ordered by the Oklahoma Banking Department.

The guilty plea changes the case posture from prosecution to sentencing. U.S. District Judge Charles Goodwin will impose sentence after completion of a presentence investigation report. Under federal sentencing guidelines the bank-fraud count carries a statutory maximum of 30 years in prison, though actual time served will depend on loss amount, acceptance of responsibility and criminal history.

Sentencing has not been scheduled.

Downstream, the plea requires Grotzinger to cooperate with any remaining aspects of the government’s investigation and to forfeit any proceeds traceable to the offense. The FDIC will use the resolution to pursue civil recovery actions against responsible parties to recoup losses to the insurance fund.

Federal banking regulators can now move forward with permanent industry bans or civil money penalties against Grotzinger without awaiting trial outcome. The case forms part of the Justice Department’s broader enforcement effort targeting senior executives of failed banks.

This marks the resolution of criminal charges first brought against the former CEO years after the bank’s closure. The original failure prompted parallel FDIC enforcement actions and a receivership that transferred customer accounts to another Oklahoma bank. The guilty plea concludes the criminal component of the regulatory response to the 2018 collapse.