Magazine article American Banker

Ban, $204K in Fines for Ex-Chairman, Wife, Brother

Magazine article American Banker

Ban, $204K in Fines for Ex-Chairman, Wife, Brother

Article excerpt

The former chairman of a California bank, his wife, and his brother have agreed to banishment from the industry and fines of more than $200,000 to settle charges that they ran the bank for their personal benefit.

The Office of the Comptroller of the Currency had charged Gerald Garner with secretly extending credit to his wife, who was also a director of the bank, and his brother, who was a senior official.

The agency seized their American Commerce National Bank, Anaheim, in April 1993.

In the settlement, the Garners neither admitted nor denied guilt. Gerald, Joan, and Daniel Garner must pay a total of $204,000.

The Garners could not be reached for comment. Gerald Garner is still fighting the OCC. In a $75 million lawsuit, he charges the regulator with wrongful seizure of his bank.

The fine is "one of the biggest ... to be leveled in a number of years," said Frank Goldman, an attorney with the Comptroller's Office. "The bank had its fair share of problems.

The Garners were also accused of using bank funds to pay Gerald Garner's personal legal expenses; of concealing the position of Mr. Garner's brother at the bank; and of hiding the bank's true financial condition.

In addition, Mr. Garner had the bank file a lawsuit without evidence to support its charges and pay excessive compensation to him and the other directors, according to the Comptroller's Office.

The OCC also alleged that the Garners made false statements to national bank examiners; concealed ownership interests in entities that received extensions of credit from the bank; and extended credit to related entities without adequate financial information and controls. …

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