Bank gets cease-and-desist order over BSA violations; 4 prohibited from future service in banks

One cease-and-desist order against a bank in Kansas over Bank Secrecy Act violations and four prohibitions of former bank employees from any future service in a federally insured financial institution were among the 13 enforcement orders issued in August by the Federal Deposit Insurance Corp. (FDIC), according to information announced Friday by the agency.

The C&D order was with CBW Bank of Weir, Kan., which the FDIC said violated the BSA and implementing rules. Under that order, executed Aug. 19, the bank had 30 days to “cease all activity pertaining to foreign financial institution customers.” That included, but was not limited to, funds transfer, remote deposit capture (RDC), U.S. dollar repatriation, money service business (MSB) remittances, automated clearinghouse (ACH) transfers, funds transfers to or from any foreign central bank accounts, “and all activity pertaining to domestic MSB transfers until the FDIC determines that the Bank has made sufficient progress” toward satisfying prescribed steps toward implementing an effective BSA compliance program as well as internal controls, oversight, staffing, and training.

The four consent prohibition orders, with the parties neither admitting nor denying guilt, barred the following from future participation in the affairs of any federally insured financial institution:

  • Jimmy Allen Monk, formerly president of PrimeSouth Bank Tallassee, Ala., found to have used false and fraudulent pretenses, representations, and promises to obtain unauthorized advances from a loan issued to a bank customer and applied the proceeds to unrelated loan accounts of other persons;
  • Robert J. Hager, formerly chief executive officer of Border State Bank (know called Border Bank) of Greenbush, Minn., found to have arranged for bank customers to obtain loans from the bank and transferred the loan proceeds to himself, either directly or indirectly, in violation of Regulation O; and issued unauthorized letters of credit to secure loans used to further the purchase and delivery of a personal investment without making the proper entries into the bank’s general ledger or reporting them so they could be logged in the normal course;
  • Kelley Renae Jones, formerly a loan teller at Arrowhead Bank, Llano, Texas, found by the FDIC to have used fraudulent general ledger tickets to conceal unauthorized withdrawals from bank customers’ accounts, and used those funds for her personal benefit;
  • Jessica Laine McBrayer, formerly a teller for Bancorpsouth Bank, Tupelo, Miss., found to have embezzled funds from her teller drawer and the bank’s vault for her own personal use and benefit.

The remaining eight orders were issued under section 19 of the Federal Deposit Insurance Act, permitting individuals previously barred to again participate in the affairs of any insured institution.

FDIC Makes Public August Enforcement Actions

FDIC’s August 2020 orders

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