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TURDAY, MAY 22, 1990

Creager, Robert E., partner, Coopers & Lybrand

Hershkowitz, Stephen P., deputy director of Enforcement, Office of Thrift
Supervision...

McCormally, Brian C., district counsel. Office of Thrift Supervision. Topeka.
Paul. David L, commissioner, Financial Services, Colorado Division of Finan-
cial Services......

Sandefur. Terry, assistant deputy district director, Supervision, Office of
Thrift Supervision, Topeka........

Van Cleave, Dorothy, assistant deputy district director, Examinations, Office
of Thrift Supervision.

Weinstein, Harris, chief counsel. Office of Thrift Supervision

Wullschleger, Herb, partner, Ernst & Young.....

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Anonymous letter dated October 25, 1988, to M. Danny Wall and Kermit
Mowbary, submitted by Mr. Wylie.

531

Background information for Silverado hearings provided by minority staff .......
Correspondence with witnesses ..............

187

202

Office of Thrift Supervision:

Joint statement of Stephen P. Hershkowitz, Brian C. McCormally, Terry
Sandefur, and Dorothy Van Cleave.

274

News Releases dated January 10, 11, 19, 23 and 26, 1990..

192

Silverado Banking, Savings and Loan Association:

Examination History from January 1980 to December 1968.

172

Index of Key Supervisory Actions...

Holding Company Loan charts.

Loan Pool chart.

Overview

Quid Pro Que Program charts.

Supervisory Chronology.

Silverado Hypergrowth chart

(m)

164

173

168

155

166

175

162

Silverado Banking. Savings and Loan Association-Continued

Silverado Self-Funding Capital Transactions
Transactions with Related Partes charts....

Information provided by OTS on Silverado's transactions with Bill L. Walters
related entities....

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Memorandum dated January 18. 1990, from OTS enforcement and the Topeka District Office to the ERC regarding recommendation for action in respect of Neil M. Bush

533

Questions for Mr. Paul submitted by Hon. Bunning
Questions for Mr. Paul submitted by Hon. Wylie.
Supplemental information submitted by Mr. Paul

Memorandum dated February 17, 1988, from Jack Grace and Dennis Lacey, Coopers & Lybrand, to office files, regarding a meeting with Silverado management........

532

540

535

542

Supplemental submission, charts prepared by Office of Thrift Supervision.

525

WITNESSES

WEDNESDAY, MAY 23, 1990

Bunchman, Richard J., former director, Silverado Banking.

Bush, Neil M., former director. Silverado Banking...
Ingels, Diane E., former director, Silverado Banking.
Page, Marjorie K., former director. Silverado Banking.
Vitkus, Richard F., former director, Silverado Banking.

Prepared statements:

Annunzio, Hon. Frank...
Gonzalez, Hon. Henry B..

APPENDIX

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ADDITIONAL Material SUBMITTED FOR THE RECORD

Correspondence with witnesses

202

Excerpt from GAO Report on Thrift Failures; Officers and Directors Breached
Their Duties, Including Those Relating to Internal Controls

622

Internal memorandum dated February 23, 1987, regarding significant loans declined by Silverado banking, submitted by Hon. Parris.

569

Letter dated November 5, 1986, from Neil M. Bush to Michael Wise regarding a $900,000 line of credit for Good International

629

Office of Thrift Supervision Manual: Director Information Guidelines.

571

Subpoena resolution ....

5.50

Wise, Michael, memorandum and letter dated July 15, 1985 regarding Neil M.
Bush joining Silverado Board of Directors...

567

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WASHINGTON, D.C., Jan. 10 -- Two former officers and directors (! Silverado Banking, Savings and Loan Association, Denver, Colo., have agreed to OTS consent orders, without admitting any wrongdoing, that prohibit them from working for federally insured financial institutions without prior approval of the appropriate requlatory

agency.

The office of Thrift Supervision reached the settlement vita Richard K. Vandapoel, former board vice chairman and chief operatim officer of silverado, and Robert K. Lavis, former board vice chairma and chief financial officer. The thrift was placed inte receivershiĮ in December 1988. While an OTS investigation was still under vey, Lewis and Vandapool consented to the issuance of the order without admitting any wrongdoing.

Federal examiners had expressed grave concerns over the soundnews of Silverado's management in the months before its closing, OTS 1414

OFFICE OF THRIFT SUPERVISION

CRIMINAL REFERRAL FORM
(OTS FORM 366)

SECTION A

0000060

TO BE COMPLETED FOR ALL CRIMINAL REFERRALS

1. Name, Location and Docket Number of Financial Institution

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2.

3.

Docket Number: 02745

If activity occurred at branch office(s), identify:
Activity occured at Main Office as detailed below.

Asset Size of Financial Institution: $8,961,146,000 (as reported on the September 30, 1989 Thrift Financial Report).

Approximate date and dollar amount (prior to any allowances for restitution or recovery) of suspected violation

Date: July 27, 1988

Amount: $25,000,000

(Month) (Day) (Year)

4.

Summary characterization of the suspected violation. Mark appropriate box(es) with an X.

[ ] Defalcation/Embezzlement [ ] Bribery/Gratuity

(X) False Statement

[ ] Check Kiting

[ ] Bank Fraud

[ ] Misuse of Position

[ ] Unexplained Loss

Bank Secrecy Act/
Money Laundering

or Self Dealing [X] Other(Describe)

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[ ] Credit Card Fraud

S.

Has there been any admission or a confession?

6.

[ ] Yes [X] No If so, by whom? None

Explanation/Description of Suspected Violation (Give a brief summary of the suspected violation, explaining what is unusual or irregular about the transaction.)

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7.

David L. Paul, Chairman and Chief Executive Officer of CenTrust Bank, a
State Savings Bank (CenTrust) is suspected of "parking securities with
the Bank of Credit and Commerce International (BCCI), Luxembourg. At
the time of the suspected securities parking, Ghaith Pharaon (who
owns 28% of CenTrust stock), was also a major shareholder in
Inter-Redec, the broker handling the repurchase from BCCI. Also,
according to newspaper articles, Mr. Pharoan was at one time a
principal of BCCI and may still be affiliated in some manner. In early
1989, BCCI was indicted for money laundering.

The securities "parking" noted above may constitute a violation of
Title 15, sections 78ff, 78, 770, and 77x of the United States
Criminal Code. Also, the failure of CenTrust to report this activity
to regulatory authorities may violate Title 18, section 1006 of the
United States Criminal Code. These statutes are shown below:

Title 15 U.S.C. sec. 7801 791
securities laws.

770 and 77

Criminal violations of

Title 18 U.S.C. sec. 1006 False entries and reports or statements, including material omissions, made with intent to injure or defraud insured institution or deceive an Office of Thrift Supervision examineri receipt of any benefits by an officer, agent or employee of the institution from a transaction of the institution with intent to defraud by the individual.

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d. Relationship to the financial institution. Mark all applicable box(es):

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