Magazine article American Banker

Alleged Customer Fraud Hits WSFS Earnings

Magazine article American Banker

Alleged Customer Fraud Hits WSFS Earnings

Article excerpt

Byline: Hilary Burns

WSFS Financial in Wilmington, Del., said its fourth-quarter results will take a hit tied to an alleged fraud scheme and a decision to surrender its Bank-Owned Life Insurance policies.

The $6.9 billion-asset company said in a press release Thursday that it would record a pretax operating expense of $2.8 million, or 6 cents a share, tied to a series of loans to Zahid Aslam, who faces charges of conspiracy to commit bank fraud and making false statements on loan applications.

WSFS disclosed the alleged fraud in June, shortly after Aslam was charged. A WSFS loan officer was also charged with conspiring with Aslam.

The company said Aslam's loans became delinquent when he decided to liquidate business assets following his indictment. It said it is working with insurance carriers to recoup losses "and believes it has a strong case for recovery in 2018."

WSFS also said it will surrender all Bank-Owned Life Insurance policies, which banks typically use to offset the costs of employee benefits. …

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