Two more top executives at a Southfield, Mich., bank received civil money penalties – totaling $270,000 – and were prohibited from future service at federally insured financial institutions, the regulator of national banks said in revealing enforcement actions for March.
The Office of the Comptroller of the Currency (OCC) said former executives of Sterling Bank and Trust, FSB, Thomas Lopp and Michael Montemayor were assessed fines of $150,000 and $120,000 respectively. Lopp is the former president, chief operating officer, and chief financial officer of the bank; Montemayor was the bank’s president of retail and commercial banking.
According to the OCC, Lopp was fined and prohibited for “failing to appropriately oversee the bank’s operation of its Advantage Loan Program, supervise bank employees, and intervene when an individual who was not a bank officer issued directives to bank employees and otherwise participated in bank operations.” The program is described by the OCC as a “low-document residential loan program … that presented high risks for fraud, money laundering, and lending misconduct and therefore required strong monitoring and controls.”
Montemayor, the agency said, was assessed the fine and prohibition for “failing to appropriately oversee the bank’s operation of its Advantage Loan Program, and appropriately supervise bank employees, or escalate concerns to the board’s attention.”
The actions against Lopp and Montemayor follow other recent enforcement actions taken against officers of the bank. In February, the OCC announced a $50,000 fine and prohibition against Stephen Adams, former senior vice president and managing director of residential lending, also involving the Advantage Loan Program. The agency said he failed to appropriately supervise, investigate, and discipline employees originating residential mortgage loans.
In January 2023, the OCC barred Hao Liang “Frank” Hu, also a Sterling Bank worker, after he pleaded guilty to a federal charge of conspiracy to commit bank fraud and wire fraud. The OCC said that Hu earned more than $2.5 million in commissions through the origination of fraudulent loans in the Advantage Loan Program. He also signed a plea agreement that stated he engaged in a widespread conspiracy to engage in a sophisticated bank and wire fraud scheme centering on the loan program.
The OCC also announced:
- A prohibition against Samantha Cherry, Former Manager at a St. Louis, Mo., branch of UMB Bank, N.A., Kansas City, Mo., for embezzling $439,000 in cash from the bank.
- A prohibition against Juan F. Velez Restrepo, former personal banker at a New York branch of Citibank, N.A., Sioux Falls, S.D., for abusing his access to an elderly bank customer’s account and misappropriating more than $166,000 in customer funds.