Fraud Probed at American Commerce Bank : Investigation: Federal regulators asked the FBI to target the institution, whose operators have been accused of lying and concealing records.
The FBI said Friday that it has launched a bank fraud and embezzlement investigation into American Commerce National Bank, which federal regulators seized last April after accusing its operators of lying, concealing records and wasting the bank’s financial resources.
The Santa Ana office of the FBI opened an investigation at the request of regulators soon after they used new legal powers for the first time to take over the apparently healthy Anaheim bank.
Regulators have not issued a formal written request, called a referral, but the FBI does not need one to start looking into financial institution fraud, said Michael S. Anderson, the agency’s supervisor of the local bank fraud unit.
Anderson also acknowledged that the FBI had looked at the bank at least once before, but a slew of failed savings and loan cases, including the probe of notorious Lincoln Savings & Loan in Irvine, had put the investigation of American Commerce on the back burner.
Several years ago, a number of people who had had run-ins with Gerald J. Garner, the bank’s chairman, had sought help from the FBI, and agents had conducted several interviews at the time.
Neither Garner nor his lawyer could be reached for comment Friday.
His attorney, Frank P. Barbaro of Santa Ana, is preparing a lawsuit on behalf of American Commerce shareholders against regulators. Garner has asked other shareholders to join in. A major caveat in joining the lawsuit, however, is that shareholders must waive any rights they have to sue Garner and the other former directors.
Investigating failed financial institutions takes a long time because agents typically have to pore over thousands of documents left in the files of bankrupt banks and thrifts. “Bank cases are so large that it takes a couple of years just to determine if you have anything,” Anderson said.
After a 1989 federal law gave regulators more power and the FBI a new emphasis on uncovering financial institution fraud, the agency and federal banking regulators compiled a list of top-priority cases. The agency’s district headquarters in Los Angeles decided to go after the biggest and the most noteworthy cases first.
Now some of those big, highly visible cases are winding down or are already closed, Anderson said, and more recent bank failures are caused more by economic conditions than by fraud.
At Lincoln, the only remaining work for the FBI is the sentencing of eight aides and associates of convicted operator Charles H. Keating Jr., who is serving state and federal prison terms.
American Commerce is one of eight failed Orange County financial institutions being investigated for fraud at the top levels, Anderson said.
The others are Mission Viejo National Bank, Mission Valley Bank in San Clemente, First Newport Bank in Newport Beach, Beach Savings Bank in Fountain Valley, Guardian Savings & Loan in Huntington Beach, Delta Savings & Loan in Westminster and Charter Savings Bank in Newport Beach.
Two other institutions, Mercury Savings & Loan in Huntington Beach and American Diversified Savings Bank in Costa Mesa, had been top-priority targets. But federal prosecutors declined to press charges against any of the thrifts’ former directors or officers, and the cases have been closed, Anderson said.
The FBI’s Santa Ana office has five agents assigned to investigating fraud at failed institutions, and all of them now have other duties as well, he said. In addition, nine more agents and five financial analysts work on some 200 cases of alleged fraud, typically false loan application documents, at healthy financial institutions.
