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OCC bans and fines former PA banker

Northumberland, PA
08/01/2019
Fine Amount: 
$100,000
Penalty Type: 
Issued by: 

The OCC has issued a Consent Order to Scott A. Heintzelman, former president, director and senior trust officer of Northumberland National Bank, Northumberland, Pennsylvania, ordering that he be prohibited from participating in any manner in the affairs of any insured financial institution or credit union or related organizations, and that he pay a civil money penalty of $100,000.

The OCC found that, while serving as the head of the bank's trust division, Heintzelman --

  • caused the bank to execute thousands of trades of fixed income securities during the period from April 2002 to May 2014 between customer trust accounts at the securities’ face or par value (“par value cross-trades”), without consideration to the actual market value of the securities being traded on behalf of the trust customers, resulting in trust customers having to pay or receive an unfair price on the trades, and causing the bank to suffer losses of $1.21 million (with interest) to reimburse trust customers for their losses. plus costs and fees for attorneys, accountants and consultants to identify and remediate SAE's misconduct.
  • caused the bank, contrary to the trust account agreements, to provide guarantees of principal and earnings to approximately 19 trust accounts and periodically created or instructed others to create false
    trust account statements for those customer accounts, causing the bank to suffer losses of approximately $50,000 when those guarantees were honored, and additional losses related to costs and fees of attorneuys, accountants, etc.
  • obtained $10,000 in cash from a chronically ill trust customer and held the cash in his desk at the Bank from April 2014 to November 2014, in an attempt to defraud the customer or otherwise facilitate fraud and maintained no records or other written documentation to show that he was legitimately holding the customer’s $10,000 in cash or the purpose for holding such cash.
  • misappropriated tax return preparation fees amounting to at least $10,600 by directly charging and collecting such fees from Bank trust account customers for his personal benefit.

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