A member of the founding family of Farmers & Merchants Bank has pleaded guilty to stealing nearly $2 million from a customer’s account.
Matthew J. Walker, who managed the bank’s Laguna Hills branch, entered the guilty plea before U.S. District Judge Andrew J. Guilford in Santa Ana. Walker’s attorney said he squandered the stolen money on a failed investment.
Walker, 34, admitted to stealing the money by taking advances from a customer’s line of credit during a 16-month period during 2009 and 2010. He made interest payments on the loan to conceal the theft, according to a plea agreement.
Walker’s father, Daniel, is president of the bank, one of the oldest in Southern California with 22 branches in Orange and Los Angeles counties. Daniel Walker said the bank discovered the theft during a routine audit, immediately reimbursed the customer and fired his son. The loss was covered by insurance, he said.
“We’re very disappointed,” Daniel Walker said in an interview Monday. “This was an unfortunate incident. This was a business deal he was doing on his own.”
He said the bank responded swiftly to the problem.
“Just because it’s a family member doesn’t change the responsibilities of the bank by any means,” he said. “You take care of the customers first. That’s where our loyalty and focus is. I don’t believe the customer is aware of the activity. They were not affected.”
Matthew is the fifth generation of the Walker family involved in Farmers & Merchants, which was founded in 1907 by rancher C.J. Walker. He got his start at the bank as a coin roller 15 years ago, according to a biography on the website of Chapman University, where he earned a master’s degree in business administration in 2008.
According to a plea agreement, Matthew Walker used the stolen money to invest in a failed company called Xoodlz Inc. Little information about the company was available in public records.
His attorney, James W. Spertus, said Walker is remorseful and intends to repay the money.
“Mr. Walker exercised very bad judgment, acknowledged his conduct was a crime and accepted full responsibility,” Spertus said. “It’s devastating because he had all the hope and promise of a successful future in the banking industry.
“People make mistakes. People with character right wrongs, and that’s what he’s trying to do.”
Sentencing is scheduled for May 21. The charge, theft of bank funds, carries a maximum sentence of 30 years in prison. Under a plea agreement, Walker can expect a sentence of four years in prison, the U.S. attorney’s office said in a news release. Spertus said he would argue for a lesser sentence.