FDIC enforcement actions released

The FDIC has released a list of orders of administrative enforcement actions taken against banks and individuals in August (and one in July). Included were four removal and prohibition orders, two civil money penalties, and one notice of a hearing on an intent to prohibit.

A former New Jersey chief loan officer was assessed a $15,000 civil money penalty and issued a prohibition order for knowingly originating loans and extending the maturity dates on existing loans to borrowers despite their inability to repay, and for causing inaccurate. past-due reports on the loans to be provided to the board of directors of his bank. A former chief operating officer and board secretary of a Kentucky bank was assessed a $35,000 penalty and banned from the industry for causing the bank to pay for credit card expenses associated with non-bank business.

The notice of hearing on the FDIC's intent to prohibit was issued to a former Brownsville, Tennessee, banker who pleaded guilty in August 2017 to federal charges of embezzlement and misapplication of $888,470, before being sentenced to 33 months in jail and five years' probation, and ordered to pay $947,951 in restitution. This former head teller, customer service supervisor and branch administrator's series of unauthorized withdrawals from customer accounts over 11 years involved 334 transactions in at least 14 customer's accounts. The scheme was uncovered when two customers asked the bank for print-outs of their accounts while the former banker was away on vacation, and immediately noticed their account balance was incorrect.