A bank with locations in the central and southern San Joaquin Valley paid $1.75 million to resolve embezzlement and fraud allegations against a bank it purchased in 2013, the U.S. Attorney’s Office reported.
The allegations stem from a case in which a former accountant for political campaigns and nonprofits, Kinde Durkee, siphoned millions into her own account at First California Bank, which Pacific Western purchased in 2013.
PacWest Bankcorp, based in Los Angeles, has locations in Fresno, Visalia and Bakersfield. The case was held in federal court in Fresno.
Durkee pleaded guilty to federal mail fraud charges in March 2012. For years, Durkee controlled hundreds of First California client accounts and used unauthorized check transfers to funnel the money into her own account, the U.S. Attorney’s Office said in a news release.
Durkee was sentenced to eight years in federal prison for defrauding clients such as Sen. Dianne Feinstein, the Associated Press reported at the time.
The U.S. Attorney’s Office alleged that First California ignored obvious signs that Durkee was stealing from her clients by failing to comply with internal protocols and procedures to prevent and detect fraud. Durkee’s fraud went on for years, resulting in millions of dollars lost to her customers.
“People who commit white-collar crimes such as embezzlement, fraud and money laundering often use the banking system to facilitate their crimes,” U.S. Attorney Phillip A. Talbert said. “The Department of Justice will continue to hold accountable financial institutions that allow such conduct to occur by turning a blind eye to obvious criminal activity.”
The settlement agreement is for allegations only that relate exclusively to First California’s conduct before it was bought by Pacific Western. Liability was not determined, the U.S. Attorney’s Office said.