$600,000 and Employee Missing From Encino Bank
Valley State Bank in Encino reported Thursday that about $600,000 has been embezzled from its precious-metals division and that an employee suspected of the crime has disappeared.
The FBI is investigating the theft, which was discovered Dec. 30, the bank said.
“Let’s just say he did not return to work,” bank Chairman John C. Bedrosian said of the employee, whose name was not disclosed.
“The theft was very sophisticated,” Bedrosian said.
The loss was in the bank’s Financial Assets Division at its Encino headquarters, which finances customers’ purchases of rare coins or metals.
Unlike many banks, Valley State regularly lends money to investors who buy rare coins or metals such as gold, platinum and silver. Either the bank or another institution holds the metals as collateral until the 180-day loan is paid off.
A pamphlet on precious metals put out by the bank says, “finance a new purchase--use our money instead of yours.”
In this sort of business, money is routinely shifted from one bank account to another by wire transfer. The bank did not give details of the alleged embezzlement, but when asked if the employee transferred the $600,000 into his personal bank account and then withdrew the money, Bedrosian said, “It was something like that.”
The bank continues to lend money in precious metals, the bank chairman said. “We have no problem with the lending part of the business. It’s a growth area of the bank,” he said.
Valley State Bank, which has six branches, has had its share of financial problems. It lost $1.7 million in 1985, its worst performance since opening in 1979. In 1983 and 1984 the bank lost a total of $976,035.
For the nine months ended last Sept. 30, Bedrosian said, the bank had a loss of about $25,000. As of June 30, the bank had assets of $107.8 million.
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