FDIC assesses $12.5 million penalty over BSA violations

Ten enforcement orders issued in December by the federal bank deposit insurer included a $12.5 million civil money penalty against a bank and a $125,000 penalty against a former bank president, according to information released Friday.

The $12.5 million penalty was assessed by the Federal Deposit Insurance Corp. (FDIC) against Apple Bank for Savings, New York, N.Y., over findings that the bank violated the Bank Secrecy Act (BSA) and its implementing regulations and failed to comply with a 2015 consent order in “a timely manner,” a consent order shows.

The FDIC also issued a removal order and assessed a $125,000 penalty against Harry C. Calcutt III, formerly the president and chief executive officer of Northwestern Bank, Traverse City, Mich. The FDIC order says the agency found that Calcutt engaged in “unsafe and unsound banking practices and breached his fiduciary duties to the Bank by increasing the Bank’s exposure to its largest borrower relationship to enable the borrowers to make payments on their existing loans, while concealing the true nature of the transactions from the Bank’s board of directors and its regulators.”

The FDIC said its December orders included three consent orders, one termination of consent order, three section 19 orders, two removal and prohibiton orders and two orders to pay civil money penalties.

December 2020 Enforcement Decisions and Orders