Ex-bank CEO fined $50,000

WARREN – The Office of the Comptroller of the Currency has fined the former CEO of the now-defunct First Place Bank of Warren $50,000.

Steven R. Lewis, CEO and a director of the bank and its holding company, First Place Financial Corp., from 2008 to 2012, “engaged in reckless unsafe or unsound practices,” “breached his fiduciary duty” to the bank and the “violations, practices, or breaches were part of a pattern of misconduct” causing losses to the bank, according to an Aug. 25 OCC consent order.

The order states Lewis “failed to ensure that the bank properly identified and accounted for problem assets and troubled debt restructurings, to accurately report its income and capital, and to ensure an adequate allowance for loan and lease losses balance.”

The OCC, an independent bureau within the U.S. Department of the Treasury, regulates national banks.

Lewis agreed to the consent order, but did not admit nor deny the comptroller’s findings.

He was ordered to pay $25,000 upon execution of the order; another $12,500 by Feb. 25, 2017; and the final $12,500 by Aug. 25, 2017.

In a Monday email to the Tribune Chronicle, Lewis said he would not “comment on the circumstances that took place at the bank so many years ago.” He said those circumstances “were involved, complicated and technical.”

He said the regulators “played a significant role in making some poor judgment calls as well as getting into a battle of egos” with the bank’s outside auditors who “advised, defended and supported the bank’s accounting practices.”

Lewis was fired April 20, 2012, as the top management official at First Place Bank and the following month was removed as a member of the bank’s board of directors. Michigan-based Talmer bought First Place out of bankruptcy at the end of 2012.

Lewis said the OCC denied his repeated requests to access to his old files that contained “volumes of notes and reports.”

He stated, “The cold, sad truth is that the government has unlimited resources and time at their disposal. They can assign lots of young, inexperienced staff who read a few reports and then draw their own incomplete conclusions no matter the degree of accuracy. They can write down a bunch of half-truths and even no-truths in varied contexts and do it without consequences.

“The government can say and do whatever it wishes and remain unchecked because, unless you are among the very wealthy, you will be subject to what equates to regulatory extortion. As a result, I have enormous empathy for anyone who has or will get thrust into a David vs. Goliath scenario such as this. It is literally a no-win situation. I don’t know who created this ‘rigged’ process but this is not my America.”

The OCC said Lewis caused the bank to file materially inaccurate thrift financial reports for 2008, 2009, 2010 and 2011, and to “incur substantial expenses to restate its financials and correct its misstated books and records;” as the CEO, he “participated in restructuring a cash-out refinance mortgage loan to a troubled borrower” who was a partner in his outside business; used bank resources for his personal use; and “failed to timely disclose” a $9.8 million judgment against him and a troubled bank borrower to the board.

The OCC, Lewis stated, “waited over four years to bring this to a head and on matters that extended as far back as a decade ago. So much for due process.”

He stated, “I spent 29 years of my life in that company trying to build a team and a culture that was focused on its customers and local community… a culture that others wanted to emulate. I am not sorry for that. It is, however, personally devastating to me to have this ‘settlement’ tattooed to my resume; I simply had no practical alternative available. I am no longer a public person per se and do not wish to debate these matters in public anymore. I just wish to move on and be left alone.”

OCC filings show other First Place executives have been fined in the past several years. Albert P. Blank, former president and COO, was ordered to pay $45,000 in December 2015. The OCC said from 2008 to 2010 he failed to properly identify and account for problem assets, accurately report income and capital and ensure an adequate allowance for loan and lease losses; that he approved multiple extensions of credit without determining the borrowers’ ability to pay; and in 2011 he failed to disclose second mortgage liens to facilitate the sale of a first mortgage to Federal National Mortgage Association.

In 2013, Eric C. Diamond, former senior vice president, and Jaime J. Diamond, former assistant vice president, were each fined $5,000. The OCC said that in 2008 they each made false statements and representations and provided false documentation connected to a residential mortgage and “violated laws, engaged in unsafe or unsound practices, and breached” fiduciary duties to the bank; received personal benefit and caused financial loss to another insured depository institution; and “demonstrated personal dishonesty and willful and / or continuing disregard for the safety and soundness of the bank.”