The Federal Reserve Board recently suspended a loan officer who was charged with fraud committed while working at another bank.
William R. Kahler was suspended from working at Primebank in LeMars, Iowa, according to a Fed consent notice of suspension and prohibition.
“Kahler’s continued service may pose a threat to the interests of the bank’s depositors,” the Fed said in the notice.
In September 2005, a grand jury in an Iowa U.S. district court indicted Kahler with committing two violations of federal law during his tenure, around April 2003, as a loan officer of Iowa-Nebraska State Bank, a Federal Deposit Insurance Corp.-insured bank. The indictment charged that Kahler made a false entry in records of the bank and “participated, shared in, or received, directly or indirectly, money, profit, property or benefits through a transaction, loan, commission, contract, or other act of the I-N Bank,” the order said.
Such violations of breach of trust or dishonesty are punishable by imprisonment of more than a year, according to the order.
The Federal Deposit Insurance Act reportedly permits banking regulators to limit the activities of bank officials who have been charged with certain criminal offenses pending the resolution of the charges.
“Kahler’s continued service as a loan officer of the [Primebank] may threaten to impair public confidence” in the bank as the criminal charges have already generated adverse publicity in the LeMars area, and such publicity “is likely” to be further fueled when Kahler’s jury trial begins Dec. 5 approximately 25 miles from LeMars, the Fed said.
Kahler’s consent to the suspension does not constitute an admission to any of the board’s allegations, the Fed noted.
The suspension will remain in effect until the indictment is disposed of, or until the board terminates it, the notice said.
