Saturday, April 08, 2023

GoLocalProv Information Group

Three banking and finance executives in Rhode Island are being charged by the Federal Deposit Insurance coverage Company (FDIC) for “recklessly partaking in unsafe or unsound practices,” because it pertained to the issuance of bridge loans.

Robert S. Catanzaro and Danielle Desrosiers —  high executives with Impartial Financial institution in East Greenwich — and finance skilled John Ponte are dealing with almost one million {dollars} in restitution and penalties by the FDIC.

In accordance with the FDIC, of the 201 bridge loans referred by Ponte to the financial institution, 44% defaulted, and the financial institution was capable of charge-off $1.6 million.

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In the end, SBA suffered an estimated lack of $8.8 million on the assured portion of the loans.

What the FDIC Claims

Within the 48-page “Discover of Prices, the company ranges a sequence of costs.

“Respondent Catanzaro, instantly or not directly, violated laws, recklessly engaged in unsafe or unsound practices in reference to the Financial institution, and breached fiduciary duties owed to the Financial institution from June 2017 by means of 2019 (Related Instances). Respondent Catanzaro’s violations, practices, and breaches had been a part of a sample of misconduct, brought on the Financial institution to endure greater than a minimal loss or different harm, and brought on Respondent Catanzaro to obtain monetary acquire or different profit. Respondent Catanzaro’s violations, practices, and breaches concerned private dishonesty and demonstrated Respondent Catanzaro’s willful or persevering with disregard for the protection or soundness of the Financial institution,” FDIC states within the enforcement motion.

Related allegations are made towards Desrosiers, who’s now not on the financial institution.

FDIC costs John Ponte with the next:

“The FDIC decided that John C. Ponte was an institution-affiliated occasion of the Financial institution. Respondent Ponte, instantly or not directly, violated laws and recklessly engaged in unsafe or unsound practices in reference to the Financial institution through the Related Instances. Respondent Ponte’s violations and practices had been a part of a sample of misconduct, brought on the Financial institution to endure greater than a minimal loss or different harm, and brought on Respondent Ponte to obtain monetary acquire or different profit,” claims the FDIC.

Additional, the FDIC alleges, “Ponte’s violations and practices concerned private dishonesty or demonstrated Respondent Ponte’s willful or persevering with disregard for the protection or soundness of the Financial institution. The FDIC additional decided that Respondent Ponte was unjustly enriched in reference to such violations and practices, and that the violations and practices concerned a reckless disregard for any relevant laws. “

For Ponte, that is the second time a federal regulatory company has taken motion towards him or one in every of his firms in recent times.

In 2020, a GoLocal report concerning Federal Commerce Fee motion towards a Rhode Island firm sparked nationwide consideration.

The Federal Commerce Fee charged Ponte Investments, LLC, and its proprietor with falsely claiming to be an permitted lender for a federal coronavirus aid lending program and requested a federal courtroom to right away halt their misrepresentations.

The FTC’s criticism alleged that Ponte Investments, LLC, additionally doing enterprise as SBA Mortgage Program and SBA Mortgage Program.com, and its proprietor, Ponte, had been falsely claiming an affiliation with the U.S. Small Enterprise Administration (SBA) and advertising and marketing themselves to small companies as an permitted lender underneath SBA’s Paycheck Safety Program (PPP).

Ponte denied the allegations by the FTC.

In the end, Ponte settled with the FTC and paid no penalties.

And in 2009, the RI Division of Enterprise Regulation revoked the dealer lending license of one other one in every of Ponte’s firms — Dream Home Mortgage.

The DBR choice acknowledged, “On or earlier than March 9, 2009, the Licensee shall in an orderly documented method switch all present loans, transactions, functions and associated information at present in course of to a duly Rhode Island licensed Mortgage Dealer in good standing; offered nonetheless, that instantly upon receipt of this Order, the Licensee shall notify the Division in writing of the identify and handle of a duly licensed Rhode Island Mortgage Dealer to whom the Licensee proposes to switch stated information. No switch shall happen with out the Division’s approval of the 93000339LB proposed by the Licensee. “

All Three Deny FDIC’s Allegations.

In a telephone interview with GoLocal on Friday, Heather Marshall, President and COO of Independence Financial institution stated, “The financial institution had nothing to do with the actions. And, we deny the entire allegations. Mr. Catanzaro denies that he engaged in any prohibited conduct and can vigorously defend himself towards the FDIC allegations.”

Independence Financial institution, positioned in East Greenwich, has been cited by federal regulators up to now. In 2019, Independence entered right into a consent decree with the FDIC on unrelated points, and was pressured to adjust to a variety of regulatory necessities.

At the moment, Catanzaro serves because the CEO to the Financial institution.

Ponte stated in a press release offered to GoLocal, “I strongly dispute the wrong and unfounded allegations within the Federal Deposit Insurance coverage Company’s (“FDIC”) Discover of Prices filed towards me, and others. Merely put, these costs are opposite to the documentary proof accessible on this matter. The FDIC has chosen to disregard the information. As just lately as earlier this week, I offered the FDIC, as soon as once more, with proof discrediting sure of the allegations within the Discover of Prices.

“For instance, the Discover of Prices alleges sure conduct that the FDIC suggests constitutes forgery and/or fraud. This isn’t the case. The instrument referenced within the Discover of Prices was merely a wire switch request, and never a affirmation as alleged. The topic request was cancelled as Independence Financial institution modified its closing circumstances, together with a previous requirement {that a} UCC Termination be obtained previous to closing and funding. No such termination was ever obtained by the financial institution because it altered its personal closing circumstances – I had nothing to do with this course of. Evidently an FDIC-insured and controlled monetary establishment would know the distinction between a request and a affirmation,” stated Ponte. 

Ponte blames former financial institution officers, stating, “The allegations contained within the Discover of Prices are the results of an organized effort by Independence Financial institution’s former senior administration to deflect its failure to adjust to sure banking tips and procedures. The financial institution’s goal was to scapegoat me for its lack of sound lending practices, in addition to to cowl up its lack of adherence to well-established requirements of apply in its SBA mortgage program, and failure to report correct info to the FDIC.”

“Extra particularly, sure people previously and/or at present affiliated with Independence Financial institution waited for an opportune time to shift blame away from their shortcomings and place it on me. This consists of impugning my skilled and private enterprise popularity by making scurrilous and unsubstantiated assaults on my character. Relatively than terminate its relationship with me and my agency, Independence Financial institution seems to have been motivated by greed although it now alleges I used to be such a foul individual to conduct enterprise with. This complete scenario boils all the way down to a transparent lack of management in Independence Financial institution’s compliance division, which wholly failed in its cost,” added Ponte. 

“I didn’t trigger any hurt to any purchasers of the SBA mortgage program,” he provides.

Ponte asserts Independence has a “unhealthy file.”

In accordance with Ponte, “Independence Financial institution has routinely been cited by the SBA for deficiencies in its underwriting, securitization, servicing and/or collections, which resulted within the lack of its authorization as an SBA lender due to its prior conduct. Neither myself nor my agency has by no means been the topic of any hostile motion by the SBA, and we proceed to responsibly and ethically originate potential SBA mortgage functions for SBA lenders pursuant to every particular person lenders’ tips or insurance policies.”

“It’s mine and my firm’s purpose to proceed to work carefully with our purchasers and companions to assist them safe financing to stabilize and broaden their companies throughout these difficult financial occasions,” added Ponte.

Desrosiers criticized the FDIC and Independence Financial institution’s executives for his or her actions.

“I’m upset that the FDIC has chosen to make these baseless allegations whereas I’ve been absolutely cooperating with their investigation. These allegations are a coordinated effort by varied Senior Members of Administration at Independence Financial institution to deflect duty for his or her failure to adjust to the Small Enterprise Administration’s (SBA) laws and to not disclose correct info to the Federal Deposit Insurance coverage Company (FDIC),” stated Desrosiers. 

“I resigned from the Financial institution over 5 years in the past in January of 2018. The Financial institution was absolutely made conscious of my private relationship, which resulted in me stepping down from my COO place in January of 2017. To be clear, I didn’t interact in any improper conduct with the SBA mortgage program. I adopted the Financial institution’s route and steerage close to this system as Senior Administration had over 20 years of expertise with the SBA. I used to be a challenge supervisor for this system and had no previous lending expertise.  I used to be not an underwriter, approver, nearer or servicer,” she acknowledged.

Desrosiers provides, “My actions whereas employed at Independence Financial institution, and since resigning, had been absolutely clear to the financial institution’s management. Mr. Ponte and I had been in a private relationship and dwelling collectively. The transfers had been associated to dwelling bills. We’ve got confirmed to the FDIC that these transfers occurred properly earlier than any involvement with MCA financing and continued after I left the financial institution and was nonetheless dwelling with Mr. Ponte. These allegations made towards me by a former consultant of the financial institution are with out advantage and I’ll vigorously defend myself. I’ll proceed to totally cooperate with the FDIC, as I’ve been for the final 4 years.”

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