Former Crawfordsville banker convicted of embezzling more than $600,000

DAVENPORT - A former Crawfordsville banker pleaded guilty this week in federal court to embezzling over $425,000 and taking over $200,000 in extra bonuses and salary from his bank officer wife, who also was convicted earlier this year.

Russell Wagler, former president and CEO of Peoples Savings Bank, pleaded guilty Monday to one count of embezzlement of bank funds by a bank employee and one count of obstruction of a bank examination in U.S. District Court of the Iowa's Southern District. He faces up to 35 years in federal prison and a fine and restitution of more than $1 million.

During the plea, Wagler admitted to setting up numerous straw loans involving existing customers at the bank from December 2002 until March 2013. These loans allowed Wagler to use the credit or another to acquire money for personal use. The loans totaled a loss of $425,977 for the bank.

He also admitted that he received multiple unauthorized bonuses and increased salaries from his wife, Heidi Wagler, a Wayland bank officer for her family's business, Country Bancorporation which owned seven banks, including Peoples, according to the plea. The total loss to the bank was an additional $200,964 from January 2008 until October 2013.

The plea shows on Feb. 9, 2012, Wagler was notified of an upcoming risk management examination by the FDIC, and three of the straw loans were paid off with three new straw loans. Wagler paid those off so they wouldn't show up on the bank's loan records. No promissory notes could be found for these loans, according to the plea.

Heidi Wagler, 50, was convicted last October on one count of embezzlement by a bank officer. She stole more than $1 million from her family's business over nine years. She was sentenced in February to three years in federal prison and ordered to pay $1,065,799 in restitution and a $50,000 fine.