I really don't know if this story made national news. It was a major
local news story for years, mostly because the story would never end.

Washington Federal Bank for Savings, a thrift (savings and loan),
committed bank fraud requiring FDIC to cover $140 million in losses, an
amazing amount of money for a tiny institution.

Basically, the president of the bank authorized loans to friends that
were not expected to be repaid. His relatives were on the board of
directors, and employees were making outstanding loans as repaid.

One of the recipients of a "loan" was Patrick Daley Thompson. He's in
prison. He was an alderman and nephew of Mayor Richard M. Daley. Mayor
Daley was never stupid enough to take bribes.

In 2011, the CFO, not a relative of the bank president, while doing her
job, noticed that there was a significant balance on a loan owned by a
friend of the president that bank employees had marked "paid" in
documents presented to an auditor.

The CFO immediately notified two of the bank's five board members, one
of whom was the sister of the president. She ducked speaking to the CFO
that day and the following day. The CFO then quit on the following day.

The former CFO wrote a detailed letter to the US Attorney within days.
The US Attorney forwarded the letter to the FBI, more than a month
later. The former CFO also wrote letters to the bank's federal
regulators.

Another 6 1/2 years later, regulators finally closed the bank. They
noticed obvious discrepancies in their own routine audit but never
looked into evidence provided by the former CFO.

The federal government moves at a glacial pace, but they don't talk to
each other and then they don't do anything. They willfully ignore
evidence presented to them, and then by failing to act in a timely
manner, the taxpayers are out massive amounts of additional monies.

In fact, the two board members used as a defense that they weren't
criminally liable for the fraud for having ignored the CFO's information
because so did multiple agencies of the federal government.

The same board member, the sister, was alerted to another man with an
outstanding loan not being repaid two years earlier and did nothing. This
man was eventually convicted of embezzling $6 million from the bank.

https://chicago.suntimes.com/the-watchdogs/2024/05/03/bridgeport-bank-failure-barbara-glusak-washington-federal-bank-savings-whistleblower-embezzlement

Adam H. Kerman <ahk@chinet.com> wrote:
> I really don't know if this story made national news. It was a major
> local news story for years, mostly because the story would never end.
>
> Washington Federal Bank for Savings, a thrift (savings and loan),
> committed bank fraud requiring FDIC to cover $140 million in losses, an
> amazing amount of money for a tiny institution.

I thought the FDI FDIC didn’t cover savings and loans.

I also thought that savings and loans couldn’t legally use the word “bank“
in their name, which is why they use weird spelling derivations.

>
> Basically, the president of the bank authorized loans to friends that
> were not expected to be repaid. His relatives were on the board of
> directors, and employees were making outstanding loans as repaid.
>
> One of the recipients of a "loan" was Patrick Daley Thompson. He's in
> prison. He was an alderman and nephew of Mayor Richard M. Daley. Mayor
> Daley was never stupid enough to take bribes.
>
> In 2011, the CFO, not a relative of the bank president, while doing her
> job, noticed that there was a significant balance on a loan owned by a
> friend of the president that bank employees had marked "paid" in
> documents presented to an auditor.
>
> The CFO immediately notified two of the bank's five board members, one
> of whom was the sister of the president. She ducked speaking to the CFO
> that day and the following day. The CFO then quit on the following day.
>
> The former CFO wrote a detailed letter to the US Attorney within days.
> The US Attorney forwarded the letter to the FBI, more than a month
> later. The former CFO also wrote letters to the bank's federal
> regulators.
>
> Another 6 1/2 years later, regulators finally closed the bank. They
> noticed obvious discrepancies in their own routine audit but never
> looked into evidence provided by the former CFO.
>
> The federal government moves at a glacial pace, but they don't talk to
> each other and then they don't do anything. They willfully ignore
> evidence presented to them, and then by failing to act in a timely
> manner, the taxpayers are out massive amounts of additional monies.
>
> In fact, the two board members used as a defense that they weren't
> criminally liable for the fraud for having ignored the CFO's information
> because so did multiple agencies of the federal government.
>
> The same board member, the sister, was alerted to another man with an
> outstanding loan not being repaid two years earlier and did nothing. This
> man was eventually convicted of embezzling $6 million from the bank.
>
> https://chicago.suntimes.com/the-watchdogs/2024/05/03/bridgeport-bank-failure-barbara-glusak-washington-federal-bank-savings-whistleblower-embezzlement
>

--
The last thing I want to do is hurt you, but it is still on my list.

Adam H. Kerman <ahk@chinet.com> wrote:

>I really don't know if this story made national news. It was a major
>local news story for years, mostly because the story would never end.

>Washington Federal Bank for Savings, a thrift (savings and loan),
>committed bank fraud requiring FDIC to cover $140 million in losses, an
>amazing amount of money for a tiny institution.

>Basically, the president of the bank authorized loans to friends that
>were not expected to be repaid. His relatives were on the board of
>directors, and employees were making outstanding loans as repaid.

>One of the recipients of a "loan" was Patrick Daley Thompson. He's in
>prison. He was an alderman and nephew of Mayor Richard M. Daley. Mayor
>Daley was never stupid enough to take bribes.

>In 2011, the CFO, not a relative of the bank president, while doing her
>job, noticed that there was a significant balance on a loan owned by a
>friend of the president that bank employees had marked "paid" in
>documents presented to an auditor.

>The CFO immediately notified two of the bank's five board members, one
>of whom was the sister of the president. She ducked speaking to the CFO
>that day and the following day. The CFO then quit on the following day.

The sister has been sentenced to several months.

Sister of crooked Bridgeport bank's CEO sentenced to 3 months in prison
for her role in bank's collapse
In handing down the sentence, U.S. District Judge Virginia Kendall told
Janice Weston, "It's very troubling. You have a few moments in time
where you knew it was illegal and you could have left."
By Tim Novak
Chicago Sun-Times
May 16, 2024, 6:19pm CDT
https://chicago.suntimes.com/the-watchdogs/2024/05/16/bridgeport-bank-failure-janice-weston-sentencing-washington-federal-bank-savings-embezzlement

>. . .