The Office of the Comptroller of the Currency (OCC) dismissed an enforcement action and withdrew a fine against the former chief compliance officer for the now-defunct U.S. branch of Rabobank N.A.
Acting Comptroller of the Currency Michael Hsu wrote in a final decision Wednesday the agency “reluctantly” decided to drop its case against Laura Akahoshi, Rabobank N.A.’s former CCO and a former OCC bank examiner. The agency alleged Akahoshi participated in an effort in 2013 to withhold information from an OCC examiner regarding a material audit of Rabobank’s Bank Secrecy Act/anti-money laundering (BSA/AML) program.
In its decision, the OCC overturned an administrative law judge’s decision finding fault with Akahoshi’s actions and a $30,000 fine because the judge “did not fully address documents and testimony favoring” Akahoshi.
Akahoshi disputed the document requested by the OCC was in fact an audit and that it was produced to the OCC on the date the agency requested, according to her attorney, Justin Weddle.
Rabobank N.A. was a California-based subsidiary of Netherlands-based Rabobank Group that was sold to Mechanics Bank in 2019.
The details: Akahoshi was hired as CCO at Rabobank N.A. in 2008. She had previously been an OCC bank examiner for a decade.
In 2013, the OCC said its examiners requested a copy of an outside audit of the bank’s BSA/AML program conducted by Crowe on three separate occasions, but that Rabobank’s executives, including Akahoshi, conspired to delay sending the report to the agency for more than a month. Rabobank executives said they felt the Crowe report contained inaccuracies.
Akahoshi supplied the Crowe report and a related Power Point presentation to the OCC via email in April 2013, along with other documentation regarding the inaccuracies contained in the report. The OCC characterized Akahoshi’s and Rabobank’s response as “evasive and misleading.” For her part, Akahoshi said her response reflected “an honest effort to summarize information gathered from bank officers … who had more direct knowledge of the Crowe engagement,” the OCC said.
In February 2018, Rabobank N.A. pleaded guilty to conspiring to defraud the United States by unlawfully impeding the OCC’s ability to regulate the bank and to obstruct an examination by the agency as part of a $369 million enforcement action by the Department of Justice. The OCC levied a $50 million penalty in coordination with the Justice Department’s action.
In August, the OCC entered into a settlement with Rabobank N.A.’s Chief Executive John Ryan and fined him $20,000 for his role in obstructing a BSA/AML program examination. The OCC had previously levied a $50,000 fine against Akahoshi for related misconduct that was later reduced to $30,000.
The OCC said its dismissal of the enforcement action against Akahoshi “in no way condones or vindicates [her] conduct. The OCC expects prompt, unrestricted access to a national bank’s books, records, and documents of any type during any supervisory activity.
“Bank personnel are required to give any OCC examiner prompt and complete access to all such materials during examinations of any length, scope, or type. Nothing in this decision alters, lessens, or obviates these supervisory expectations.”
Akahoshi response: “The administrative proceeding against Laura—from its inception and through the many years that it has been pending—was riddled with factual, legal, and constitutional defects,” said Weddle in an emailed statement on behalf of his client. “While dismissal of this enforcement action is a resounding victory for Laura, it is also a transparent attempt by the OCC to avoid subjecting the agency’s own conduct and meritless enforcement action to public and judicial scrutiny in federal court.”
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