Former Dacotah Bank Employee in US Banned from Working in Banks After Fraud Case
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The Board of Governors of the Federal Reserve System has issued an official Order of Prohibition against Nicholas Leroy Klug, a former employee of Dacotah Bank, Aberdeen, South Dakota.
The action comes after Klug was convicted of theft for misappropriating $26,428.57 from the bank between December 2023 and November 2024. At the time, Klug was working as the market retail lead of a branch of the bank.
In April 2025, a North Dakota court found Klug guilty of theft following his guilty plea. He was sentenced to 360 days in jail, but the sentence was suspended. The court also ordered him to repay the stolen money in full to the bank.
According to the Federal Reserve, Klug’s actions broke the law, violated banking rules, and showed dishonesty and disregard for the safety of the bank. Because of this, he agreed to enter into a Consent Order of Prohibition with the Federal Reserve.
Under this order, Klug is permanently banned from working in any capacity with banks or other financial institutions regulated by federal law. He cannot:
- Work for or manage any insured bank or its holding companies.
- Vote in bank-related decisions.
- Serve as a director, officer, or employee in any financial institution.
If Klug violates this order, he could face civil or criminal penalties. The order will remain in effect unless it is officially modified or removed by the Federal Reserve.
The case highlights the strict measures regulators take to protect the safety and soundness of banks. Even though Klug avoided jail time, his conviction and the order effectively end his career in banking.
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