Fraud Identification Training Sept-Oct 2022

CASE STUDY 17

You ask the loan administration officer if she knows what banks refinanced the borrowers. She responds that she does not know for certain, but thinks the loan proceed checks were from Coast Bank of Florida. She isn't sure because she was overwhelmed with work during July, and VP Wilson helped her out by processing both the initial booking of his loans as well as assisted with periodic updates to the loan files. At the daily afternoon meeting of the examination team, you discuss what you have been finding with the EIC. Both you and the EIC agree that the refinancing activity is odd since the Florida bank is located 400 miles to the south of the Georgia bank and there is no local branch or loan origination office in the immediate area. The EIC decides that a closer review of this activity is warranted. The EIC contacts the Field Office Supervisor (FOS) in Florida and informs him that Coast Bank has been taking out a number of poor quality commercial loans originated in the Georgia area. The EIC provides the FOS with a list of the previously classified credits and requests that someone review the line sheets from the last exam of Coast Bank. The next day the FOS calls the EIC and informs him the borrowers are at Coast Bank but that they were not refinanced, their loans were purchased with recourse from the Georgia bank.

IDENTIFY THE RED FLAGS __________________________________________________________________

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