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Former Nebraska banker fined and banned

North Platte, NE
05/22/2018
Fine Amount: 
$10,000
Penalty Type: 
Issued by: 

Justin D. Schwartz, former SVP and market president of NebraskaLand National Bank, was issued a consent order for a $10,000 civil money penalty and order of prohibition banning him from participating in any way in the banking industry. The OCC found that Schwartz was SVP and Kearney Market President of the bank from Mary 2013 to August 2016, and that:

  • Between approximately April 2013 and August 2015, Schwartz made false statements and representations to Customer A that he was authorized to sell Bank stock. Over the course of three transactions, Schwartz misappropriated $334,000 from Customer A in connection with the fraudulent sale of stock, and provided Customer A with a falsified stock subscription agreement. In November 2016, Respondent repaid Customer A all funds.
  • Between July 2015 and July 2016, Schwartz received four personal loans ranging from $2,500 to $143,000 from Customer B and Customer C while serving as their loan officer. Despite the conflict of interest, Schwartz failed to disclose his financial relationship with Customer B and C to the Bank, in violation of the Bank’s written Code of Ethics.
  • While employed by the Bank, Schwartz engaged in various loan misconduct related to additional customers for which he was the loan officer. He made material changes to loan terms without approval or authorization from the appropriate loan committee(s), and failed to record the modifications on the Bank’s books and records; caused the Bank to originate loans that misstated the purpose of the loans; made false statements to customers regarding the status of loans; forged a customer’s signature on two modification agreements; altered a customer’s personal financial statement; and caused a customer’s loan payment to be miscoded on the Bank’s books and records such that the payment schedule was modified without approval or authorization.
  • By reason of his conduct, Schwartz engaged in violations of 18 U.S.C. §§ 1014 [false statements on loan application] and 1005 [unauthorized issuance of bank stock], engaged in reckless unsafe or unsound practices, and breached his fiduciary duty to the Bank; which violations, practices, or breaches were part of a pattern of misconduct, caused or were likely to cause more than a minimal loss to the Bank, and resulted in pecuniary gain to Respondent. The misconduct resulted in financial gain to Schwartz and loss or risk of loss to the Bank, and demonstrated personal dishonesty, willful or continuing disregard for the safety and soundness of the Bank.

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