Path: ...!eternal-september.org!feeder3.eternal-september.org!news.eternal-september.org!.POSTED!not-for-mail From: "Adam H. Kerman" Newsgroups: rec.arts.tv Subject: Lessons from one of the biggest bank frauds ever Date: Sun, 5 May 2024 16:54:35 -0000 (UTC) Organization: A noiseless patient Spider Lines: 47 Message-ID: Injection-Date: Sun, 05 May 2024 18:54:36 +0200 (CEST) Injection-Info: dont-email.me; posting-host="3ddef9db0e7e5846c62a1b885eabafdc"; logging-data="2073067"; mail-complaints-to="abuse@eternal-september.org"; posting-account="U2FsdGVkX1+5GoxWcyXF/JGyDHiRjrbvw9KMlJa8CqQ=" Cancel-Lock: sha1:EWx4TXV27ReV7gNCrBMOW45Qac0= X-Newsreader: trn 4.0-test77 (Sep 1, 2010) Bytes: 3255 I really don't know if this story made national news. It was a major local news story for years, mostly because the story would never end. Washington Federal Bank for Savings, a thrift (savings and loan), committed bank fraud requiring FDIC to cover $140 million in losses, an amazing amount of money for a tiny institution. Basically, the president of the bank authorized loans to friends that were not expected to be repaid. His relatives were on the board of directors, and employees were making outstanding loans as repaid. One of the recipients of a "loan" was Patrick Daley Thompson. He's in prison. He was an alderman and nephew of Mayor Richard M. Daley. Mayor Daley was never stupid enough to take bribes. In 2011, the CFO, not a relative of the bank president, while doing her job, noticed that there was a significant balance on a loan owned by a friend of the president that bank employees had marked "paid" in documents presented to an auditor. The CFO immediately notified two of the bank's five board members, one of whom was the sister of the president. She ducked speaking to the CFO that day and the following day. The CFO then quit on the following day. The former CFO wrote a detailed letter to the US Attorney within days. The US Attorney forwarded the letter to the FBI, more than a month later. The former CFO also wrote letters to the bank's federal regulators. Another 6 1/2 years later, regulators finally closed the bank. They noticed obvious discrepancies in their own routine audit but never looked into evidence provided by the former CFO. The federal government moves at a glacial pace, but they don't talk to each other and then they don't do anything. They willfully ignore evidence presented to them, and then by failing to act in a timely manner, the taxpayers are out massive amounts of additional monies. In fact, the two board members used as a defense that they weren't criminally liable for the fraud for having ignored the CFO's information because so did multiple agencies of the federal government. The same board member, the sister, was alerted to another man with an outstanding loan not being repaid two years earlier and did nothing. This man was eventually convicted of embezzling $6 million from the bank. https://chicago.suntimes.com/the-watchdogs/2024/05/03/bridgeport-bank-failure-barbara-glusak-washington-federal-bank-savings-whistleblower-embezzlement