Gibraltar Private Bank & Trust Money Laundering Order (Paul S. Singerman - Owner)
Gibraltar Private Bank & Trust Money Laundering Order (Paul S. Singerman - Owner)
Gibraltar Private Bank & Trust Money Laundering Order (Paul S. Singerman - Owner)
Before the
OFFICE OF THRIFT SUPERVISION
)
In the Matter of ) Order No.: SE-10-046
)
)
GIBRAL TAR PRIVATE BANK ) EtTective Date: October 15,2010
AND TRUST COMPANY )
)
Coral Gables, Florida )
OTS Docket No. 08007 )
WHEREAS, Gibraltar Private Bank and Trust Company, Coral Gables, Florida, OTS
Docket No. 08007 (Association), by and through its Board of Directors (Board), has executed a
Stipulation and Consent to Issuance of Order to Cease and Desist (Stipulation); and
WHEREAS, the Association, by executing the Stipulation, has consented and agreed to
the issuance of this Order to Cease and Desist (Order) by the Office of Thrift Supervision (OTS)
WHEREAS, pursuant to delegated authority, the OTS Regional Director for the
Southeast Region (Regional Director) is authorized to issue Orders to Cease and Desist where a
1. The Association, its institution-affiliated parties, I and its successors and assigns, shall
cease and desist from any action (alone or with others) for or toward causing, bringing about,
participating in, counseling, or aiding and abetting the unsafe or unsound banking practices that
resulted in operating:
(a) the Association with an ineffective Bank Secrecy Act (BSA) and Anti-Money
(b) the Association with an excessive level of adversely classified loans or assets,
(c) with an asset liability policy that does not address all requirements of the
2. The Association, its institution-affiliated parties, and its successors and assigns, shall also
cease and desist from any action (alone or with others) for or toward causing, bringing about,
participating in, counseling, or aiding and abetting violations of the following laws and
regulations:
3. Within sixty (60) days, the Association shall revise its policies, procedures and systems
related to the BSA/AML laws and regulations (BSA/AML Compliance Program) to address all
corrective actions set forth in the May 5, 2010 Report of Examination (2010 ROE). The
Association's BSA/AML Compliance Program shall comply with all applicable BSA/AML
Laws and Regulations 2 and regulatory guidance, and, at a minimum, provide for:
to determine whether changes in such program may be necessary to adjust to changes in:
(i) the BSA/AML Laws and Regulations and OFAC Regulations; and (ii) the
Association's operations that may impact its compliance with the BSAIAML Laws and
Regulations and OFAC Regulations. Within sixty (60) days of completing its annual
review of the BSAIAML Compliance Program, the Association shall update its
BSAIAML Compliance Program and send a copy of its updated BSAIAML Compliance
BSA/AML Laws and Regulations include, but are not limited to, the Currency and Foreign Transactions Reporting
Act, as amended by the USA PATRIOT Act and other laws (the Bank Secrecy Act or BSA), 31 USC §§ 5311 ~
~, and the related regulations issued and/or administered by the U.S. Department of the Treasury's Financial
Crimes Enforcement Network (FinCEN), 31 CFR §§ 103.11 ~~, the related BSA regulations issued by OTS, 12
CFR §§ 563.177 and 563.180 (collectively the BSA Laws and Regulations), and the Office of Foreign Assets
Control (OFAC) regulations set forth at 31 CFR Part 500 (the OFAC Regulations).
BSA/AML Compliance Officer; (ii) report to the Audit Committee of the Board, and (iii)
actively manage, coordinate and monitor the Association's day-to-day compliance with
the BSA/AML Laws and Regulations and OFAC Regulations and the Association's
BSAIAML Compliance Program. The BSAI AML Compliance Officer shall have
sufficient authority, expertise, competency, and resources to perform his or her assigned
(c) annual BSAIAML training for all Association personnel whose duties require
knowledge of the BSA/AML Laws and Regulations and OFAC Regulations that is
appropriate to their duties and responsibilities. Further, the Association shall provide
BSA/AML training for the Board that, at a minimum, covers the importance of the
noncompliance with such laws and regulations, and the risks posed to the Association by
training, including but not limited to, materials sufficient to identify the dates the training
(d) implementation of a system that allows for the effective daily aggregation of
multiple transactions and the proper filing of a Currency Transaction Report (CTR)
(e) a Customer Identification Policy (CIP Policy) that has adequate customer due
heightened BSA/AML risk, including, but not limited to, non-U.S. resident accounts,
commercial and business accounts, customers with significant wire transfer activity, and
Association shall maintain current customer profiles for Higher Risk Customers and
engage in enhanced due diligence and monitoring of Higher Risk Customer accounts and
transactions;
(f) a CIP Policy that complies with all applicable laws, regulations, and regulatory
guidance including, but not limited to, 31 C.F.R. § 103.121 and 12 C.F.R. 563.177(b).
The Association shall timely obtain and maintain appropriate customer documentation as
with all applicable BSAI AML Laws and Regulations and OF AC Regulations (BSA
Independent Testing). BSA Independent Testing must be: (i) performed with an
appropriate level of frequency per applicable regulations; (ii) fully documented; and (iii)
(h) a system of internal controls to comply with the BSA/AML Laws and Regulations
and the OF AC Regulations. Such internal controls must include written policies,
procedures, and processes to monitor all transactions: (i) for full compliance with the
BSAI AML Laws and Regulations and the OF AC Regulations; and (ii) to timely report
BSAI AML Risk Assessment), based upon the specific products, services, customers,
entities, and geographic locations of the Association that may expose it to money
the BSAIAML matrix set forth in Appendix J of the FinCEN BSAIAML Examination
Manual. The BSAI AML Risk Assessment shall identify the number of accounts that are
potentially medium or high risk, and describe the basis for such detennination; and
U) a system to ensure that transactions are monitored and that all suspicious
transactions and activity are reported to FinCEN in compliance with 31 C.F.R. § 103.18
and 12 C.F.R. § 563.180(d). The Association shall monitor, assess, and review the
and its rationale to file, or not file, a Suspicious Activity Report (SAR). The Association
shall maintain supporting documentation for all filed SARs and decisions made to not file
aSAR.
4. Within thirty (30) days, the Association shall engage a qualified independent third party
(Consultant), acceptable to the Regional Director, to conduct a review of all account and/or
compliance with the BSAI AML Laws and Regulations and OF AC Regulations (BSA Account
Review). The Consultant shall identify all Relevant Relationships that are in violation of the
BSA/AML Laws and Regulations and OFAC Regulations and, within ninety (90) days after the
Effective Date of this Order, prepare a written report (Look Back Report) that, at a minimum:
(a) identifies and provides details for all Relevant Relationships that were or are not
in compliance with the BSAIAML Laws and Regulations and OF AC Regulations; and
(b) sets forth corrective actions with respect to each Relevant Relationship identified.
5. Within thirty (30) days after receipt of the Look Back Report, the Association shall
implement corrective actions to ensure that all Relevant Relationships noted in the Look Back
copy of the BSA/AML and OFAC Look Back Report, including the status of any corrective
actions taken, shall be provided to the Regional Director within ten (10) days of its completion.
6. Within sixty (60) days, the Board shall submit its revised BSA/AML Compliance
Program to the Regional Director for review and non-objection. Within thirty (30) days of
receipt written notification of non-objection from the Regional Director, the Board shall adopt
and ensure that the Association implements and adheres to the revised BSAIAML Compliance
Program.
7. Within sixty (60) days, the BSA Officer shall submit a written report to the Board that
discusses the adequacy of the Association's BSA resources and staff given the Association's risk
profile and the volume and nature of transactions (BSA Report). The BSA Report shaH set forth
the BSA Officer's finding and recommendations, including identification of additional staff or
resource needs. A copy of the BSA Report shall be provided to the Regional Director within ten
Problem Assets.
8. Within sixty (60) days, the Association shall develop a detailed, written plan with
specitic strategies, targets and timeframes to reduce 3 the Association's level of problem assets 4
(Problem Asset Reduction Plan). The Problem Asset Reduction Plan, at a minimum, shall
include:
(a) quarterly targets for the level of problem assets as a percentage of Tier 1 (Core)
3 For purposes of this Paragraph, "reduce" means to collect, sell, charge off, or improve the quality of an asset
sufficient to warrant its removal from adverse criticism or classification.
4 The term "problem assets" shall include all classified assets, assets designated special mention, and nonperforming
assets,
9. Within seventy (70) days, the Association shall submit its Problem Asset Reduction Plan
to the Regional Director for review and non-objeetion. Upon receipt of written non-objection
from the Regional Director, the Association shall implement and adhere to the Problem Asset
Reduction Plan.
10. Within sixty (60) days, the Association shall develop individual written specific workout
plans for each problem asset or group of loans to anyone borrower or loan relationship of One
11. Within sixty (60) days after the end of each quarter, beginning with the quarter ending
December 31, 2010, the Association shall submit a quarterly written asset status report
(Quarterly Asset Report) to the Board. The Board's review of the Quarterly Asset Report shall
be documented in the Board meeting minutes. The Quarterly Asset Report shall include, at a
mInImum:
(b) a comparison of problem assets to Tier 1 (Core) capital plus ALLL and Total
Risk-Based capital;
(c) a comparison of problem assets at the current quarter end with the preceding
quarter;
(e) an assessment of the Association's compliance with the Problem Asset Reduction
Plan;
(g) any recommended revisions or updates to the Problem Asset Reduction Plan.
Within sixty (60) days after the end of each quarter, beginning with the quarter ending
December 31, 2010, a copy of the Quarterly Asset Report shall be provided to the Regional
Director.
13. Within sixty (60) days, the Association shall revise its written internal asset review and
classification program (IAR Program) to address all corrective actions set forth in the 2010 ROE
relating to internal asset review, loan portfolio monitoring and asset classification. The IAR
Program shall comply with all applicable laws, regulations and regulatory guidance and at a
minimum. shall:
(a) provide for a more detailed stratification analysis of the homogeneous loan
information; and
(b) provide for the monitoring of trends in the various risk layers (i.e.; vintage,
Liquidity Management.
14. Within sixty (60) days, the Association shall revise its liquidity and funds management
policy (Liquidity Management Policy) to ensure the Liquidity Management Policy includes a
Contingency Funding Plan and complies with all applicable laws, regulations and regulatory
guidance including, but not limited to, the Interagency Policy Statement on Funding and
Liquidity Risk Management contained in CEO Memorandum No. 342 (March 17,2010).
the Regional Director tor review and comment. Upon receipt of written non-objection from the
Regional Director, the Association shall implement and adhere to the Liquidity Management
Policy. The Board's review of the Liquidity Management Policy shall be documented in the
Board meeting minutes. A copy of the Liquidity Management Policy shall be provided to the
Growth.
16. Etfective immediately, the Association shall not increase its total average assets during
any quarter in excess of an amount equal to net interest credited on deposit liabilities during the
prior quarter without the prior written notice of non-objection of the Regional Director.
Brokered Deposits.
17. Effective immediately, the Association shall comply with the requirements of 12 C.F.R. §
337.6(b).
18. Within thirty (30) days, the Association shall submit a detailed brokered deposit
reduction plan (Brokered Deposit Plan) to the Regional Director for review and non-objection.
(a) a detailed description of the current level and composition of the Association's
brokered deposits, including the source of each deposit and its maturity date;
(b) comprehensive cash flow and brokered deposit projections forecasting funding
needs and sources for each calendar quarter covered by the Brokered Deposit Plan; and
(c) detailed strategies to reduce the current level of brokered deposits, which shall
include target dates and amounts and monthly reports to the Board regarding the
20. Any modifications to the Brokered Deposit Plan must receive the prior written non-
objection of the Regional Director. The Association shall submit any proposed modifications to
the Regional Director at least forty-five (45) days prior to implementation of any modifications.
21. Within forty-five (45) days after the close of each quarter, beginning with the quarter
ending December 31, 2010, the Board shall review quarterly variance reports on the
Association's compliance with the Brokered Deposit Plan (Brokered Variance Reports). A copy
of the Brokered Variance Reports shall be provided to the Regional Director within ten (l0) days
22. Effective immediately, the Association shall comply with the prior notification
requirements for Changes in Directors and Senior Executive Officers 5 set forth in 12 C.F.R. Part
563, Subpart H.
23. Effective immediately, the Association shall not declare or pay dividends or make any
other capital distributions, as that term is defined in 12 C.F.R. § 563.141, without receiving the
prior written approval of the Regional Director in accordance with applicable regulations and
regulatory guidance. The Association's written request for approval shall be submitted to the
Regional Director at least forty- five (45) days prior to the anticipated date of the proposed
24. Effective immediately, the Association shall not enter into, renew, extend or revise any
contractual arrangement relating to compensation or benefits for any Senior Executive Officer or
director of the Association, unless it first provides the Regional Director with not less than thirty
(30) days prior written notice of the proposed transaction. The notice to the Regional Director
director, including all benefits and perquisites. The Board shall ensure that any contract,
agreement or arrangement submitted to the Regional Director fully complies with the
requirements of 12 C.F.R. Part 359,12 C.F.R. §§ 563.39 and 563.161(b), and 12 C.F.R. Part 570
25. Within thirty (30) days, the Association shall terminate or renegotiate any employment
agreements with terms that do not conform with all applicable OTS policies and guidance,
including that contained in OTS Examination Handbook Section 310 and 12 C.F.R. §563.39.
26. Effective immediately, the Association shall not make any golden parachute payment 6 or
prohibited indemnification payment 7 unless, with respect to each such payment, the Association
has complied with the requirements of 12 C.F.R. Part 359 and, as to indemnification payments,
12 C.F.R. § 545.121.
27. Effective immediately, the Association shall not enter into any arrangement or contract
with a third party service provider that is significant to the overall operation or financial
condition of the AssociationS or outside the Association's normal course of business unless, with
respect to each such contract, the Association has: (a) provided the Regional Director with a
minimum of thirty (30) days prior written notice of such arrangement or contract and a written
determination that the arrangement or contract complies with the standards and guidelines set
forth in Thrift: Bulletin 82a; and (b) received written notice of non-objection from the Regional
Director.
Violations of Law.
28. Within thirty (30) days, the Association shall ensure that all violations of law and/or
regulation discussed in the 2010 ROE are corrected and that adequate policies, procedures and
29. Within thirty (30) days, the Board shall designate a committee to monitor and coordinate
the Association's compliance with the provisions of this Order and the completion of all
corrective actions required in the 2010 ROE (Oversight Committee). The Oversight Committee
shall be comprised of four (4) or more directors, the majority of whom shall be independent9
directors.
8 A contract will be considered significant to the overall operation or financial condition of the Association where
the annual contract amount equals or exceeds two percent (2%) of the Association's total capital, where there is a
foreign service provider, or where it involves information technology that is critical to the Association's daily
operations without regard to the contract amount.
9 For purposes of this Order, an individual who is "independent" with respect to the Association shall be any
individual who:
September 30, 2010, the Oversight Committee shall submit a written compliance progress report
to the Board (Compliance Tracking Report). The Compliance Tracking Report shall, at a
mInImum:
(a) separately list each corrective action required by this Order and the 2010 ROE;
(b) identify the required or anticipated completion date for each corrective action; and
(c) discuss the current status of each corrective action, including the action(s) taken
31. Within sixty (60) days after the end of each quarter, beginning with the quarter ending
September 30, 2010, the Board shall review the Compliance Tracking Report and all reports
required to be prepared by this Order. Following its review, the Board shall adopt a resolution:
(a) certifying that each director has reviewed the Compliance Tracking Report and all required
reports; and (b) documenting any corrective actions adopted by the Board. A copy of the
Compliance Tracking Report and the Board resolution shall be provided to the Regional Director
within ten (l0) days after the Board's review of the Compliance Tracking Report.
(a) is not employed in any capacity by the Association or Holding Company, its subsidiaries, or its
affiliates, other than as a director;
(b) does not own or control more than ten percent (10%) of the outstanding shares of the Association,
Holding Company or any of its affiliates;
(c) is not related by blood or marriage to any officer or director of the Association, Holding Company
or any of its affiliates, or to any shareholder owning more than ten percent (10%) of the outstanding shares
of the Association, Holding Company or any of its affiliates, and who does not otherwise share a common
fInancial interest with any such officer, director or shareholder;
(d) is not indebted, directly or indirectly, to the Association, Holding Company or any of its affiliates,
including the indebtedness of any entity in which the individual has a substantial financial interest, in an
amount exceeding ten percent (J 0%) of the Association's total Tier I (Core) capital; and
(e) has not served as a consultant, advisor, underwriter, or legal counsel to the Association, Holding
Company or any of its affiliates.
the Association's compliance with the provisions of this Order. The Board shall review and
adopt all policies and procedures required by this Order prior to submission to the OTS.
33. This Order is effective on the Effective Date as shown on the first page. The Stipulation
Duration.
34. This Order shall remain in effect until terminated, modified, or suspended by written
notice of such action by the OTS, acting by and through its authorized representatives.
Time Calculations.
35. Calculation of time limitations for compliance with the terms of this Order run from the
Effective Date and shall be based on calendar days, unless otherwise noted.
36. The Regional Director, or an OTS authorized representative, may extend any of the
deadlines set f0l1h in the provisions of this Order upon written request by the Association that
includes reasons in support for any such extension. Any OTS extension shall be made in writing.
37. All submissions, including any reports, to the OTS that are required by or contemplated
consents or other documents relating to this Order shall be in writing and sent by first class U.S.
mail (or by reputable overnight carrier, electronic facsimile transmission or hand delivery by
No Violations Authorized.
39. Nothing in this Order or the Stipulation shall be construed as allowing the Association, its
IT IS SO ORDERED.
James G. Price
Regional Director, Southeast Region
)
In the Matter of ) Order No.: SE-l 0-046
)
GIBRALTAR PRIVATE BANK ) Effective Date: October 15,2010
AND TRUST COMPANY )
)
Coral Gables, Florida )
OTS Docket No. 08007 )
WHEREAS, the Office of Thrift Supervision (OTS), acting by and through its Regional
Director for the Southeast Region (Regional Director), and based upon information derived from
the exercise of its regulatory and supervisory responsibilities, has informed Gibraltar Private
Bank and Trust Company, Coral Gables, Florida, OTS Docket No. 08007 (Association), that the
OTS is of the opinion that grounds exist to initiate an administrative proceeding against the
issue Orders to Cease and Desist where a savings association has consented to the issuance of an
order; and
WHEREAS, the Association desires to cooperate with the OTS to avoid the time and
expense of such administrative cease and desist proceeding by entering into this Stipulation and
Consent to Issuance of Order to Cease and Desist (Stipulation) and, without admitting or denying
that such grounds exist, but only admitting the statements and conclusions in Paragraphs 1 and 2
Jurisdiction.
and 12 U.S.C. § 1462(4). Accordingly, the Association is "an insured depository institution" as
2. Pursuant to 12 U.s.c. § 1813(q), the Director of the OTS is the "appropriate Federal
a savings association. Therefore, the Association is subject to the authority of the OTS to initiate
and maintain an administrative cease and desist proceeding against it pursuant to 12 U.S.C. §
1818(b).
3. Based on its May 5, 2010 examination of the Association (2010 ROE), the OTS finds that
the Association has engaged in unsafe or unsound banking practices including, but not limited to,
operating:
compliance program;
(b) the Association with an excessive level of adversely classified loans or assets,
(c) with an asset liability policy that does not address all requirements of the
4. Based on its 2010 ROE of the Association, the OTS finds that the Association has
Consent.
5. The Association consents to the issuance by the OTS of the accompanying Order to
Cease and Desist (Order). The Association further agrees to comply with the terms of the Order
upon the Effective Date of the Order and stipulates that the Order complies with all requirements
oflaw.
Finality.
6. The Order is issued by the OTS under 12 U.S.C. § 1818(b). Upon the Effective Date, the
Order shall be a final order, effective, and fully enforceable by the OTS under the provisions of
12 U.S.C. § 1818(i).
Waivers.
(c) the right to seek judicial review of the Order, including, without limitation, any
such right provided by 12 U.S.C. § 1818(h), or otherwise to challenge the validity of the
Order; and
(d) any and all claims against the OTS, including its employees and agents, and any
other governmental entity for the award of fees, costs, or expenses related to this OTS
enforcement matter and/or the Order, whether arising under common law, federal
statutes, or otherwise.
8. Nothing in this Stipulation or accompanying Order shall inhibit, estop, bar, or otherwise
prevent the OTS from taking any other action affecting the Association if at any time the OTS
deems it appropriate to do so to fulfill the responsibilities placed upon the OTS by law.
9. The Association acknowledges and agrees that its consent to the issuance of the Order is
solely for the purpose of resolving the matters addressed herein, consistent with Paragraph 8
above, and does not otherwise release, discharge, compromise, settle, dismiss, resolve, or in any
way affect any actions, charges against, or liability of the Association that arise pursuant to this
action or otherwi se, and that may be or have been brought by any governmental entity other than
the OTS.
10. The laws of the United States of America shall govern the construction and validity of
11. If any provision of this Stipulation and/or the Order is ruled to be invalid, illegal, or
unenforceable by the decision of any Court of competent jurisdiction, the validity, legality, and
enforceability of the remaining provisions hereof shall not in any way be affected or impaired
thereby, unless the Regional Director in his or her sole discretion determines otherwise.
12. All references to the OTS in this Stipulation and the Order shall also mean any of the
13. The section and paragraph headings in this Stipulation and the Order are for convenience
only and shall not affect the interpretation of this Stipulation or the Order.
14. The terms of this Stipulation and of the Order represent the final agreement of the parties
with respect to the subject matters thereof, and constitute the sole agreement of the parties with
15. The Stipulation and Order shall remain in effect until terminated, modified, or suspended
in writing by the OTS, acting through its Regional Director or other authorized representative.
16. Each Director signing this Stipulation attests that he or she voted in favor of a Board
Resolution authorizing the consent of the Association to the issuance of the Order and the
Accepted by: