A bank that kept custody of the county's $800-million employee pension fund failed to pay at least $370,000 in interest due on the account, county lawyers alleged Monday.
A lawsuit filed by county Tax Collector-Treasurer Robert L. Citron also seeks $5 million in punitive damages from Crocker National Bank.
Crocker, bought last spring by Wells Fargo Bank, failed to make prompt interest and dividend payments and failed to quickly execute orders to transfer stocks, bonds and mortgages bought and sold by the pension fund, according to the suit, filed in Orange County Superior Court.
Bank Collected Payments
The suit claims that Crocker credited interest due the pension fund to its own accounts and did so "intentionally, willfully and outrageously."
Between 1981 and 1985, Crocker provided securities clearances services to the county pension fund. The bank held physical custody of the fund's securities and collected all payments earned on the investments, according to Citron.
The county and the pension fund pay other firms for advice on how best to invest the funds, Citron said.
Citron emphasized that the amount in dispute is a minuscule portion of total fund assets, which are secure.
"It has nothing to do with the safety or security of the people that belong to the retirement system," Citron said. "The fund is very secure."
The pension plan includes more than 10,000 public workers, most of them county employees. Other groups involved are municipal employees in San Juan Capistrano, Orange County Transit District workers and employees of sanitation districts in Orange County.
Bank officials were not available for comment Monday night.