OCC Announces Enforcement Actions for April 2024

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released enforcement actions taken against national banks and federal savings associations (banks), and individuals currently and formerly affiliated with banks the OCC supervises.

The OCC uses enforcement actions against banks to require the board of directors and management to take timely actions to correct the deficient practices or violations identified. Actions taken against banks are:

• Formal Agreement with First FS & LA of Lorain, Lorain, Ohio, for unsafe or unsound practices, including those related to the failure of the board of directors and bank management to develop and implement an appropriate strategic plan; appropriately manage and control liquidity and interest rate risks; implement effective Bank Secrecy Act (“BSA”) /Anti-Money Laundering internal controls; and appoint a BSA Officer with the requisite skills and expertise to oversee the BSA program, and the bank’s violation of law, rule, or regulation, including a violation relating to conducting ongoing customer due diligence. (Docket No. AA-CE-2024-3)
• Cease and Desist Order against Heritage Bank, N.A., Spicer, Minnesota, for unsafe or unsound practices, including those related to capital adequacy, capital and strategic planning, credit review, ongoing monitoring of the credit portfolio, liquidity and liquidity management practices, and the allowance methodology. (Docket No. AA-WE-2024-24). The OCC also terminated the bank’s formal agreement dated October 27, 2023 (Docket No. AA-WE-2023-32), which was replaced by the cease and desist order. (Docket No. AA-WE-2024-36)
• Formal Agreement with Minnstar Bank, N.A., Lake Crystal, Minnesota, for unsafe or unsound practices, including those related to concentrations of credit, credit underwriting and administration, appraisals, allowance for credit losses, strategic planning, incentive compensation, capital planning, and liquidity risk management, and violations of law, rule, or regulation, including those relating to loans to executive officers, lending limits, and appraisals. (Docket No. AA-CE-2024-2)

The OCC uses enforcement actions against an institution-affiliated party (IAP) to deter, encourage correction of, or prevent violations, unsafe or unsound practices, or breaches of fiduciary duty. Enforcement actions against IAPs reinforce the accountability of individuals for their conduct regarding the affairs of a bank. The term “institution-affiliated party,” or IAP, is defined in 12 USC 1813(u) and includes bank directors, officers, employees, and controlling shareholders. Orders of Prohibition prohibit an individual from any participation in the affairs of a bank or other institution as defined in 12 USC 1818(e)(7). Actions taken against IAPs are:

• Order of Prohibition and Order for Civil Money Penalty against Norman Desembrana, Former Operations Senior Manager at the Philadelphia, Pennsylvania, lockbox facility of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for concealing a significant backlog of unprocessed customer checks. The assessed civil money penalty is $40,000. (Docket No. AA-ENF-2024-10)
• Order of Prohibition and Order for Civil Money Penalty against Gary Judd, Former Chairman and Chief Executive Officer, Sterling Bank and Trust, FSB, Southfield, Michigan, for failing to appropriately oversee the bank’s operation of its Advantage Loan Program or supervise bank insiders involved in the implementation of the Advantage Loan Program. The assessed civil money penalty is $300,000. (Docket No. AA-ENF-2023-74)
• Order of Prohibition and Order for Civil Money Penalty against Scott Seligman, an Institution-Affiliated Party of Sterling Bank and Trust, FSB, Southfield, Michigan, for participating in the operation of the Advantage Loan Program, contributing to a poor compliance culture at the bank, and pressuring bank employees to quickly underwrite Advantage Loan Program loans. The assessed civil money penalty is $400,000. (Docket No. AA-ENF-2023-75)
• Order of Prohibition against Jackie M. Snider, Former Assistant Vice President at a Sulphur, Oklahoma, branch of Vision Bank, N.A., Ada, Oklahoma, for misappropriating at least $95,430 via the diversion of funds from customers’ accounts and taking efforts to conceal such misappropriation. (Docket No. AA-ENF-2024-22)

The OCC issues prohibition/suspension orders against individuals in response to certain criminal conduct. Pursuant to 12 USC 1818(g), in the case of a conviction against an IAP related to certain criminal violations, the OCC will issue an order prohibiting the IAP from any participation in affairs of a bank or other institution as defined in 12 USC 1818(e)(7). Such actions taken against IAPs are:

• Order of Prohibition against John Edmonds, Former Vice President at JPMorgan Chase Bank N.A., Columbus, Ohio, based on his conviction for commodities fraud and conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing in violation of 18 USC 371, 1343, 1348(1), and 7 USC 6c(a)(5)(C) and 13(a)(2). (Docket No. AA-ENF-2024-5)
• Order of Prohibition against Christian Trunz, Former Executive Director at JPMorgan Chase Bank N.A., Columbus, Ohio, based on his conviction for spoofing and conspiracy to commit spoofing in violation of 18 USC 371 and 7 USC 6c(a)(5)(C) and 7 USC 13(a)(2). (Docket No. AA-ENF-2024-4)

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All OCC public enforcement actions taken since August 1989 are available for download by viewing the searchable enforcement actions database at https://apps.occ.gov/EASearch.

Related Link

• Enforcement Action Types