The Federal Deposit Insurance Corp. has filed a civil suit against James W. Brown, the president of an Ogden bank that failed, accusing him of failing to supervise the bank properly.

On March 26, 1986, the state commissioner of financial institutions declared the Family Bank to be insolvent and appointed the FDIC as receiver, since the agency insured the bank's deposits.Brown, a Weber County resident, was president and chief executive officer from the nine years that the bank operated. The U.S. District Court suit says Val D. Costley was appointed manager of the Roy branch office, which opened on Sept. 26, 1980.

Beginning in 1983 and continuing until early 1986, the suit says, Costley embezzled substantial funds from bank.

According to the suit, Costley embezzled or converted about $4.5 million of the bank's funds by the time his actions were discovered in February 1986.

Costley pleaded guilty to two felony counts. In April 1986 U.S. District Judge David K. Winder sentenced him to five years in federal prison.

Two brothers - Louis V. Testa and Michael Wayne Testa, both formerly of Ogden - were also sentenced to prison for transporting embezzled money from the Family Bank to gambling resorts.

The suit says, "Brown failed to properly review monthly new loan managing, supervising and directing the bank. Because of this, the bank incurred losses that the FDIC had to repay, it says.