Former President of Mortgage Lending Sentenced for Making False Statements to the FDIC
|U.S. Attorney’s Office November 30, 2012|
A Port Huron bank president will pay $185,000 and was permanently barred from the banking industry as a result of his felony conviction for making false statements to the Federal Deposit Insurance Corporation (FDIC), U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement were Robert D. Foley, III, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Jon Rymer, FDIC Inspector General.
Douglas E. Brandewie, the former president of mortgage lending at Citizen’s First Savings Bank in Port Huron, was sentenced yesterday by U.S. District Judge Denise Page Hood.
On May 10, 2012, Brandewie pleaded guilty to one count of making a false statement to the FDIC. In January 2009, Brandewie was responsible for preparing his department’s records for examination by the FDIC. To hide unfavorable real estate appraisals from the FDIC, he purged the appraisals from the real estate mortgage files held by Citizens. The misrepresentations concealed potential loan losses and impairments from FDIC auditors, preventing an accurate assessment of Citizens’ financial stability.
This case marked the U.S. Attorney’s Office’s first-ever civil action under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which imposes civil penalties for criminal violations including making false statements to the FDIC.
Because Brandewie’s conduct did not cause a loss to Citizens Bank, Judge Hood sentenced Brandewie within the U.S. Sentencing Guidelines to one day in prison and ordered him to serve a period of supervised release of two years in addition to ordering him to comply with the $185,000 civil settlement and barring him from the banking industry.
“Accurate statements by banks to the FDIC are essential to the integrity of the bank examination process, which ensures the stability of our banking system,” McQuade said. “For that reason, the FDIC and the Department of Justice treat false statements very seriously.”
FBI Special Agent in Charge Foley stated, “Strong ethics in the banking industry are vital to maintaining stability and trust. The FBI will vigorously pursue anyone who seeks to violate the rules and engage in dishonest practices.”
The case was prosecuted by Assistant U.S. Attorneys Karen Reynolds and Leslie Wizner.