NC banker issued prohibition and CMP notice by FDIC

The FDIC has issued a Notice of Intention to Remove from Office and Prohibit from Further Participation and Notice of Assessment of Civil Money Penalty, etc. [see link to PDF file, above] to Donald C. Lancaster, as an institution affiliated party of Union Bank & Trust Company, Oxford, NC. Lancaster had 20 calendar days after service of the Notice in which to provide a written request for a hearing and response to the FDIC's allegations. The FDIC alleges that Lancaster "has directly or indirectly participated or engaged in unsafe or unsound banking practices or acts, omissions, or practices which constitute breaches of his fiduciary duty as an officer of the Bank; that as a result of such misconduct, the Bank has suffered a loss by reason of such or practices or breaches of fiduciary duty; such practices or breaches of fiduciary duty demonstrate Respondent’s personal dishonesty or his willful or continuing disregard for the safety or soundness of the Bank; and Respondent’s reckless, unsafe or unsound practices or breaches of his fiduciary duty were part of a pattern of misconduct or caused more than a minimal loss to the Bank."

Lancaster is or was Executive Vice President and Chief Banking Officer at the bank. The FDIC found that --

• Lancaster made a fraudulent nominee loan of $105,000; the loan was actually all or partially for the benefit of a company owned by a third party.
• Lancaster gave the nominee borrower an agreement that he would be held harmless on the loan.
• Later, when the third party stopped paying the loan and the nominee produced the hold harmless agreement, the bank changed off $105,087.
• Lancaster's actions warrant imposition of a Tier 2 civil money penalty of $70,000.