The Department of Justice (DOJ) announced charges Thursday against the “purported” chief compliance officer at Dominion Bank and Trust Company Limited for allegedly taking part in a multimillion dollar fraud scheme.

Gerald Shaw was arrested and charged with one count each of conspiracy to commit wire fraud and wire fraud for aiding the bank in defrauding at least 60 victims out of more than $4 million, the DOJ said in a press release.

From October 2016 until April 2020, Shaw served as Dominion Bank’s CCO despite being a convicted felon and disbarred attorney, the DOJ said. In July 2010, he pleaded guilty to wire fraud for his role in a high-yield investment fraud scheme and was sentenced to nearly six years in prison. A year later, the state of California disbarred him from practicing as an attorney.

One way Dominion Bank defrauded its victims was by issuing “worthless” financial instruments, like standby letters of credit (SBLCs), in exchange for large upfront payments, the DOJ said. Shaw was responsible for drafting these documents, according to the agency’s complaint, filed in U.S. District Court for the Southern District of New York.

Shaw was aware the bank struggled for funds. He said issuing SBLCs without the assets to back them up raised “red flags” and amounted to fraud, according to the complaint, but did nothing about it.

He also had concerns regarding the bank’s auditor, whom he described as an individual with “‘not impeccable credentials’” who got her “‘certification from a cracker jack box,’” the complaint stated. The auditor’s license was revoked, per the complaint, but was hired to audit the bank anyway.

Dominion Bank claimed to have billions of dollars in assets but generally had only tens or hundreds of thousands of dollars in its accounts, according to the complaint.

The DOJ also found the bank claimed on its website to be headquartered in New York’s financial district but only had a virtual office there shared by numerous clients. The bank also claimed on its website it was registered in Mwali and Gambia, but Dominion officers acknowledged to the DOJ for at least some of the scheme the bank lacked a valid or active banking license in Mwali, according to the agency.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

More from Jeff Dale

Topics