If you have any remaining question, the below, copied from the lawsuit (bolding is mine), will blow you away!!!
V. BofI Failed To Disclose The Criminal Background Of A Senior Officer and Violations of the FDIA
205. BofI failed to disclose that an individual who served as BofI’s Senior Vice President of Wholesale/Correspondent Lending during part of the Class Period (“SVP 1”) is a convicted felon. BofI also failed to disclose that it is in violation of the FDIA for failing to obtain a required waiver under the act for SVP 1’s employment.
206. Section 19 of the FDIA provides that a person convicted of criminal offenses involving “dishonesty or a breach of trust or money laundering,” or who has agreed to enter into a pretrial diversion or similar program in connection with a prosecution for such offense,” may not:
(i) become, or continue as, an institution-affiliated party with respect to any insured depository institution;
(ii) own or control, directly or indirectly, any insured depository institution; or
(iii) otherwise participate, directly or indirectly, in the conduct of the affairs of any insured depository institution; 12 U.S.C. § 1829(a)(1)(A).
An insured bank cannot permit any such person to engage in prohibited conduct or continue any relationship described above. (12 U.S.C. § 1829(a)(1)(B)).
207. A bank may file an application for the FDIC’s consent for the individual to become an officer or director of the bank, or the individual may seek a waiver from the FDIC from complying with Section 19. Anyone who knowingly violates Section 19 “shall be fined not more than $1,000,000 for each day such prohibition is violated or imprisoned for not more than 5 years, or both.” (12 U.S.C. § 1829(b)).
SVP 1 served as the Senior Vice President of Wholesale and
Correspondent Lending at BofI during the Class Period. According to his LinkedIn profile, SVP 1 began working at BofI in October 2010, and before that, at IndyMac Bank (the same failed bank at which Garrabrants worked) as a Senior Vice President.
According to CW 5, who worked at BofI at the same time as SVP 1 and was familiar with him, SVP 1 served as a Vice President of Wholesale and Correspondent Lending from early/mid-2010 through April 2013. CW 5 explained that “Correspondent Lending” referred to BofI’s Foreign Nationals Loan program.
SVP 1 was promoted to Senior Vice President in May 2013 and became the head of the Foreign Nationals Loan program. SVP 1 reported to Swanson.
A background search of SVP 1 performed on Lexis-Nexis revealed that SVP 1 has been convicted of numerous crimes, including grand theft, burglary, fraud and forgery involving credit cards, dealing in stolen property, and petit theft in Broward County, Florida in 1990. SVP 1 was sentenced and served time in a California prison.
He has also filed for Chapter 7 bankruptcy twice (in October 2011 and in June 2000), and has been a debtor in at least four actions involving judgments, and state and federal tax liens against him.
211. CW 5 indicated that SVP 1 was hired by BofI despite his criminal history and background check, which included fingerprints and an FBI background scan. CW 5 related that CW5 saw the results of the background check when they were received by BofI and that Garrabrants’s executive assistant brought the results to CW 5 and noted that SVP 1 had been in jail for theft. CW 5 related that the executive assistant said that Garrabrants and Swanson wanted “to sweep it under the table and give him a chance.”