Accounting firm settles FDIC claims tied to Chicago bank’s failure

A Chicago accounting firm has reached a settlement with the Federal Deposit Insurance Corp. over its alleged role in the December 2017 failure of Washington Federal Bank for Savings.

Bansley & Kiener, which denied responsibility, agreed to pay $2.5 million to resolve claims it was liable for the Chicago bank’s collapse. The accounting firm had signed off on years of financials for Washington Federal at a time when alleged fraud was taking place.

The FDIC recently announced the settlement, which was reached in late August.

Washington Federal was closed when the Office of the Comptroller of the Currency determined that it was insolvent and had millions of dollars in nonperforming loans.

The Federal Deposit Insurance Corp. sold the bank to Royal Savings Bank in Chicago.

Regulators intervened less than two weeks after John Gembara, the thrift’s chairman, president and CEO, was found dead at another customer’s home. The Cook County Medical Examiner’s office ruled the death a suicide.

A subsequent review by an internal government watchdog agency determined that supervisory lapses at the OCC made the failure’s costlier to the Deposit Insurance Fund than it should have been.

The Treasury Department’s Office of Inspector General determined in a material-loss review released in November 2018 that if had examiners acted in a timelier manner the fraud “may have been uncovered sooner and the loss to the DIF and individual account holders may have been reduced.”

Four former employees of Washington Federal were charged in August with taking actions that led to the bank’s failure.


Source link

Back to top button
SoundCloud To Mp3