FDIC’s January orders include CMPs, prohibitions; nine lift past prohibition orders

[UPDATED] A list of 25 enforcement decisions and orders – one from October, the rest from January – regarding banks and individuals were released Friday by the Federal Deposit Insurance Corp. (FDIC), including five ordering or stating the FDIC’s intent to pursue civil money penalties (CMPs) over federal rule violations.

The CMPs, totaling $45,550 in the aggregate, were for the following:

  • Jeffrey S. Fortney, formerly president, cashier, and a director of Commercial Bank of Oak Grove, Mo., was named in an October 2018 (this was included in the January list) notice of charges for an order to cease and desist and notice of assessment and order to pay a $15,000 CMP; Fortney was given 20 days to contest both. The FDIC order says Fortney altered the statements for the bank’s correspondent account with UMB Bank, National Association, misstating the balance in the correspondent account and the bank’s capital in the bank’s records, and provided altered documents to examiners in order to conceal the activity, the order says. To bring the correspondent account back into balance, Commercial Bank charged off $469,434.04 on January 9, 2017 and an additional $47,628.42 on June 23, 2017.
  • Wayne Hoffner, president and a loan officer of The Union Bank, Beulah, N.D. is assessed a CMP of $15,000 related to breaches of fiduciary duty, according to a consent C&D order. FDIC says Hoffner failed to disclose information regarding the purpose of certain loans to the bank’s board of directors and to regulators during the September 2016 examination after becoming aware that certain loan proceeds were not used for their intended purposes; and in May of 2015\ released collateral for a loan without receiving the proceeds of that collateral, leaving the loan undersecured.
  • Rebecca McWilliams, an institution-affiliated party of The Lauderdale County Bank, Halls, Tenn., was assessed a $5,000 CMP under a consent order for violating and causing the bank to violate the limits on extensions of credit to executive officers, directors, and principle shareholders.
  • Park Bank, Holmen, Wis., was ordered to pay a CMP of $7,850 for violating federal flood insurance requirements. Numerous instances were identified in the notice, which found the bank engaged in a “pattern or practice” of violating various portions of rules implementing requirements of the National Flood Insurance Act (NFIA) and the Flood Disaster Protection Act (FDPA).
  • Mainland Bank of Texas City, Texas, under a stipulation and consent order, was assessed a $2,700 CMP for violations of the FDPA. FDIC says the bank engaged in a pattern or practice of violating portions of the FDPA and FDIC rules by failing to obtain flood insurance coverage at or before loan origination, increase, renewal, or extension on 25 loans secured by a building or mobile home that is located or to be located in a special flood hazard area.

The remaining actions on the FDIC’s January list include three terminations of previous cease-and-desist orders; a prompt corrective action order; six prohibition orders; a consent order related to Bank Secrecy Act compliance; and orders restoring nine individuals’ ability to serve with federally insured depository institutions.

The individuals named in the Section 19 orders, since their prohibition from service, have “demonstrated satisfactory evidence of rehabilitation,” the orders show. They are:

  • Danielle Shazee Davis, who in 2013, pleaded guilty to one count of distribution, delivery, manufacture, or production of a controlled substance in violation of Missouri law and has, FDIC said, “demonstrated satisfactory evidence of rehabilitation”;
  • Matthew K. Wasinger, who in 2010 was convicted of misdemeanor possession of marijuana with intent to distribute in violation of Virginia law;
  • Christopher Jon Gooch, who in 1995, entered into a pretrial diversion program involving one count each of breaking and entering in the daytime with the intent to commit a felony, larceny of property valued at $250 or less, and receiving stolen property valued at over $250, all in violation of Massachusetts law;
  • Michael A. Briscoe, who in 2006 was convicted of one count of theft by receiving stolen property under Indiana law;
  • Jacques Antwann McNeil, who in 2008 entered into a deferred prosecution agreement in North Carolina for charges involving one count each of felony possession with intent to sell or deliver marijuana and misdemeanor maintaining a vehicle, dwelling or place for keeping or selling controlled substances and in 2010 also pled guilty to one count each of misdemeanor obtaining property by false pretense and misdemeanor larceny;
  • David Ryan Bell, who in 2009 entered into a deferred prosecution agreement for three charges involving possession of stolen goods in violation of North Carolina law;
  • Nicholas N. Dudley, who in 2015 ntered into a deferred-prosecution program for one count of unlawful possession with intent to deliver cannabis, in violation of Illinois law;
  • Eli Perkins III, who in 1998 was convicted of possessing with the intent to manufacture, distribute, or dispense a controlled substance, in violation of federal law; and
  • John Bernard Weinstein, who in 2007 had a program entry for one count each of forgery of a document, utter false writing and credit card improper use under $250, in violation of Massachusetts law.

All the above individuals, before working again with an insured institution, must present a copy of the orders granting their requests.

FDIC Makes Public January Enforcement Actions; No Administrative Hearings Scheduled for March 2019

January list of orders