Regulator seeks prohibition against former bank general counsel for concealing BSA/AML documents

Also: Assesses $25 million CMP against Citibank (S.D.)

A former general counsel of a California bank faces a $50,000 civil money penalty (CMP) and a prohibition from working in the banking industry, according to filings made by the regulator of national banks.

The Office of the Comptroller of the Currency (OCC) said it is seeking to prohibit Daniel Weiss, the former general counsel of Rabobank N.A. of Roseville, Calif. The OCC has also already assessed the CMP against Weiss. Under the prohibition, Weiss could not participate in any manner in the conduct of the affairs of any federally insured depository institution or any other institution, credit union, agency, or other related entity.

The OCC made the action public in releasing Friday its enforcement actions and terminations for April 2019.

According to the agency, Weiss was terminated by the bank in 2015 after having served as general counsel since 2009. According to the OCC, Weiss allegedly made false statements to the agency and concealed bank documents related to bank compliance with Bank Secrecy Act/anti-money laundering (BSA/AML) requirements.

Ultimately, with the help of a whistle blower, the OCC said, the documents were uncovered by agency examiners, who wrote that “deficiencies found in all four pillars of the Bank’s BSA/AML program” resulted in the OCC issuing a comprehensive BSA consent order against the bank on Dec. 5, 2013. That also included, in part, an assessment of a $50 million CMP against the bank on Feb. 6, 2018.

In other actions, the OCC reported a $25 million CMP against Citibank, N.A., of Sioux Falls, S.D., for inadequate oversight of a bank program known as “Relationship Loan Pricing (RLP),” meant to provide mortgage borrowers with a credit to closing costs or an interest rate reduction. However, the OCC said that because of poor training, inadequate directions and non-existent documentation for rejections of customers for benefits from the program, “certain Bank borrowers did not receive the RLP benefit for which they were eligible and were adversely affected on the basis of their race, color, national origin, and/or sex.”

According to the OCC, Citibank has executed a plan to reimburse all customers who did not receive the appropriate RLP benefit, including those customers affected by the violations. The bank is also “taking appropriate remedial actions to fully address and correct the violations of law.”

The OCC said Citibank will provide reimbursement to approximately 24,000 customers in the amount of approximately $24 million as a result of the bank’s failures and control weaknesses.

Other actions reported by the regulator for April included:

  • Signing of a formal agreement with cfsbank of Charleroi, Pa., to address “unsafe or unsound practice(s), including those relating to commercial credit oversight and administration, internal controls, corporate governance, and violation(s) of law, rule, or regulation, including those relating to conflicts of interest, regulatory reporting, and overdrafts (Regulation O).”
  • Removal and prohibitions of: Geraldine S. Moore, a former teller at U.S. Bank N.A. in Cincinnati, Ohio, for allegedly misappropriating funds for her own use from the account of a bank customer; and Ginger B. Riley, a former business associate at Wells Fargo Bank, N.A. Sioux Falls, S.D, for allegedly misappropriating funds from the bank and creating false general ledger tickets during her employment to conceal her misconduct.
  • Terminations of agreements with: Bank of America, N.A., Charlotte, N.C., entered into in February 2012; JP Morgan Chase Bank, N.A., of Columbus, Ohio, entered into in February 2012; and two agreements with Citibank, N.A. of Siouxl Falls, S.D., also entered into in February 2012.

OCC Enforcement Actions and Terminations for April 2019

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