OAKWOOD, Ohio — Just about every morning, Mark Miller would walk through the back door of the town's bar and grill and say hello to the regulars.

        Talk over coffee usually centered around the weather and sports at the high school, where Mr. Miller was a fixture on the board. His brother was the school's principal, and family members helped coach its teams.

Mark Miller and his wife, Janet, leave the federal courthouse in Toledo on March 6. (Associated Press photo) | ZOOM |

        Then, the bank executive vice president would walk next door to work at the Oakwood Deposit Bank — where federal prosecutors say he embezzled $40 million for years from friends and neighbors in the farming town of 700 people.

        “You wonder why he would do that to us,” said Gail Gribble, who works at a restaurant near Mr. Miller's home. “It's not like we're strangers.”

        The Federal Deposit Insurance Corp. seized and closed the bank's two branches, in Oakwood and nearby Grover Hill, on Feb. 1. The bank has reopened under the management of The State Bank and Trust Co.

        The collapse of this Paulding County town's only bank, which stood since 1905 and weathered droughts and the Depression, has stunned and saddened folks in northwest Ohio's farm belt. It has left a school district and a community struggling to recover.

        And it wasn't just the money. The Oakwood Deposit Bank was a place they trusted and relied upon.

        “We tend to trust people more around here because we know them,” Mr. Gribble said. “I'm starting to think I don't know anybody.”

        Much of the money went to casino boats in the South, prosecutors said. Mr. Miller also bought a horse farm and time shares — all while living with his wife and three children in a modest single-story brick home.

        Federal investigators say Mr. Miller, 47, of Grover Hill, admitted that he faked bank records and invested $15 million in the gambling boats. He told them he had manipulated records since at least 1999, according to an FBI affidavit.

        Mr. Miller has pleaded not guilty to charges of money laundering and embezzlement.

        The FDIC, which insures accounts for up to $100,000, said the bank had total deposits of $102 million. As much as $9 million was uninsured.

        Many people have gotten their money back, but stockholders lost everything — a total of about $6 million.

        The Wayne Trace school district and the county-owned hospital each lost nearly $1 million. And the village of Oakwood lost all of its $350,000 savings, forcing it to lay off five workers and cut everything but emergency repairs.

        “We're in trouble. Big trouble,” said Bud Henke, Oakwood's Village Council president. “All the town's money was in there.”

        Mr. Miller's lawyer and family have refused to comment since his February arrest. He is free on $1 million bond but confined to his house.

        Federal Reserve Governor Susan Schmidt Bies was asked about the bank failure while in Columbus recently and said the banking system cannot prevent fraud. The only thing banks can do is have internal controls in place to guard against harm, she said.

        At first it appeared that only Oakwood bank's stockholders lost money.

        But investigators discovered the bank had no outside collateral protecting funds deposited by the school district and village, as state law requires.

        The losses included $450,000 the Wayne Trace district had raised through a levy so that it could get $15.6 million from the state to renovate and add on to its two elementary schools and high school. Those construction plans are on hold.

        “It leaves everything up in the air,” said schools Superintendent Ken Doseck.

        The district has asked the state for help, appealing for money from its “catastrophic fund.” The fund, established two years ago, has been tapped just once before.

        Mr. Miller gave the school paperwork that said securities protecting its money were in safekeeping at two Cleveland banks, according to a letter the district released.

        “We did everything correctly. We did nothing different than any other school district did,” Mr. Doseck said.

        School leaders still cannot believe Mr. Miller, who spent 14 years on the board, is accused of fraud.

        “I sat on that board with him for six years and I'd never expected this,” said board President Michael Brady. “We all get along real well.”

        Mr. Miller was the friendly banker who greeted customers by their first name. He was always well-dressed, but comfortable with farmers and factory workers around town.

        He grew up on a farm just outside Grover Hill, a village of 500. His family was better off than most. Most people, though, figured he had simply made some wise investments over the years.

        He and two brothers started a company that owned a couple of carwashes and a gas station. They had a horse farm that paid off big with a horse that won $2 million in harness racing.

        Mr. Miller had a time share in Fort Lauderdale, Fla., and another in Myrtle Beach, S.C. Neighbors say they noticed the family took a lot of trips.

        “Here he was, living high on the hog off everybody else's money,” said Julie Adams, a bartender at the Landing Strip — a gathering place next to the bank.

        Janet Ross said she and her husband lost $40,000 in stocks, which they planned to pass on to their children.

        “The saddest thing is that he destroyed a business that's been here through some real hard times,” said Ms. Ross, who runs a gas station in Grover Hill.

        Generations of farmers have brought their crops to the grain elevators that tower above the towns and then deposited their checks at the bank.

        Now, Oakwood village leaders are scrambling to figure out how to cover the $350,000, which is more than half the annual budget.

        The Village Council doesn't have enough money to make its annual payment to the federal government for its new sewage plant, and street repairs are on hold.

        Still, that's not what bothers most folks.

        “People are more upset because they viewed the bank as a solid and safe place,” Mr. Henke said. “They had a lot of faith and support in it. It was blown away by one guy.”
       

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