Fraud Identification Training - Case Studies

CASE STUDY 16

previously classified borrower is shown below. The Financial Statement (FS) is self-prepared.

Bill A. Codicil 12-31-X8

ALERT Data 1-16-X9

Cash

2.0

Credit cards

35.2

(1) 10.2 (2) 101.7 (3) 18.6

RE

245.6

People’s

210.5

Autos HHG

23.5

B of A

83.7 7.3

110.4

First Union

130.5

TL

336.7

TA

381.5

NW

44.8

What is your next course of action?

During the course of your loan review, several members of your team reviewing loan files mention that debt listed on year-end 1X98 FSs of three previously classified borrowers was higher than that reflected on the ALERT line sheets. You feel confident you have accounted for all the loans through your initial balancing procedure. Just to be on the safe side, you decide to check with the loan vault clerk to make sure you have all the loan files for the various borrowers and you also pull Customer Information Files (CIFs). The loan vault clerk cannot find any additional files for the borrowers in question and the CIF totals match both the loan trial and your ALERT data. In preparation for loan discussion, you instruct your staff to pull loan histories on previously classified borrowers and those that might get classified. The loan examiners will need these histories to account for both changes since the last examination and changes since the asset review date in their loan write-ups. A review of the loan histories of the previously mentioned three classified borrowers reflect various loans advanced and paid off on the same day, as well as some principal reductions.

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