Bank CEO denies cover-ups
American Savings Bank's chief executive says that accusations of fraud are untrue
American Savings Bank CEO Constance Lau called allegations of fraud cover-ups "outrageous" and untrue, and denied any wrongdoing.
The bank's former security director and a 91-year-old customer, allegedly bilked of nearly $1 million by a bank employee in 2004 and 2005, filed separate lawsuits Aug. 2, which contained the allegations.
"This bank did not in any way, shape or form cover up anything," Lau said yesterday in a written statement.
Former security director Bert Corniel, a former Honolulu police officer, alleged in his lawsuit that the bank repeatedly tried to coerce him to conform and re-characterize reported losses by fraud as "potential losses," to keep the amount of the bank's total losses down.
Corniel also alleged that in 2002, Lau tried to force him to re-characterize the losses caused by fraud. Corniel said in his lawsuit he could not follow the bank's practice of failing to report the matter of fraudulent losses to federal agencies, which is required by law, and continued to make reports to regulatory and law enforcement agencies, including the FBI.
Corniel's attorney, John Perkin, said FBI agents interviewed his client Tuesday. But Assistant U.S. Attorney Ron Johnson would not confirm or deny that an investigation is under way.
Lau called Corniel a disgruntled former employee who made numerous untrue accusations against her personally and the bank.
Bank customer Ada Lim, 91, alleged in her Aug. 2 lawsuit that bank employee Marylin DeMotta, a former operations supervisor and assistant branch manager, had embezzled more than $900,000 from her and her son, William.
DeMotta allegedly wrote checks drawn on the Lims' trust account, bought an apartment using $110,000 of Lim's money and deposited $212,500 from the Lims' trust account into a savings account in her father's name.
Lau contradicts Lim's claims that the bank failed to fire DeMotta immediately, instead saying after the bank conducted its own investigation, DeMotta was "terminated promptly."
But DeMotta was terminated in April 2005 for an unrelated employment violation, despite having signed a confession Jan. 26, 2005, Corniel alleges.
Corniel, in his suit, said in late 2004 DeMotta helped Lim in the sale of her home, then deposited the $688,669 in proceeds into Lim's account and allegedly transferred most of it to herself by defrauding Lim.
Corniel said he was informed of the fraud on Jan. 25, 2005, by an American Savings Bank branch manager and began his investigation. He discovered bank employees knew of DeMotta's alleged fraudulent actions as early as July 2004, but no disciplinary action was taken, nor was she terminated and no efforts were made to intervene for Lim, the lawsuit said.
He alleged the bank tried to cover up DeMotta's fraud as a loan by Lim to her, and sent employees to get Lim's signature on a document meant to exonerate DeMotta and the bank, the complaint said.
Corniel alleges that when he reported his findings, he was told the bank's "management did not want to post losses of this magnitude and did not want to report the fraud as it is required."
Lau said the bank proactively files required reports to regulatory authorities and has never stopped anyone from filing such reports.
The Associated Press contributed to this report.