A former local banker has been arrested on a federal indictment charging him with bank fraud while he worked as an officer at the Progressive Savings Bank in Cookeville.
Kelly Gassaway is accused of defrauding the bank by diverting funds from customers' accounts and using the proceeds to pay his own bills in an alleged scheme which occurred from April to November, 2009. A federal grand jury issued a nine count indictment against Gassaway last week.
According to a report in the Herald Citizen, Gassaway allegedly made false entries in bank books, reports, and statements in order to use various types of accounts belonging to seven bank customers to pay his own creditors, the indictment alleges. Some of the checks were for amounts over $1,000 and some for several hundred dollars.
Gassaway was arrested by federal agents on Tuesday, March 13 and was taken to federal court in Nashville. He was later released on his own recognizance pending trial in the case.
FBI Agent Derrel Martin of the Cookeville office investigated the case.