Bank president pays $30K for lending irregularities

Rafeal Stark, CEO, President and Director of Beauregard Federal Savings Bank (DeRidder, Louisiana) was issued a consent order to cease and desist and to pay a $30,000 civil money penalty.

The OCC found that Stark, from 2009 to June 2019, Stark was the EVP and compliance officer of the bank, and has served as a director since 2015. In June 2019, he became president and CEO, and he continued in those roles when the order was signed.

The OCC found that Stark on at least two occasions between January 2017 and October 2018, knowingly originated or caused the Bank to originate unsecured consumer loans to borrowers of the Bank to provide the borrowers funds to cover the down payment and closing costs related to real estate loans. In so doing, Stark knowingly provided false and misleading information on forms the Bank used in connection with these loans and caused the Bank to approve such real estate loans using falsified information on loan documents. The OCC found that the loans were nat arranged that way at the request of the borrowers but were part of a larger practice at the Bank of falsifying loan documents and manipulating loan to value
ratios.

Also, on at least two occasions, between May 2018 and July 2019, Stark became indebted to another employee of the Bank for sums of ten thousand dollars ($10,000) or greater. These loans resulted in Respondent being indebted to a subordinate employee between June 2019 and July 2020, without disclosing this fact to the Bank’s Board of Directors.