OCC Bans Former Bankers After Misappropriation and Fraud Cases

The Office of the Comptroller of the Currency (OCC) has prohibited eight former bankers from working in the banking industry following multiple cases of misappropriation of funds and customer impersonation. These actions highlight the risks banks face from internal fraud and emphasize the importance of strong internal controls and regulatory oversight.

Cases of Misappropriation and Fraud

The OCC reported a series of serious violations at several major banks:

• JPMorgan Chase: Sixto Christopher Porras, a San Francisco-based associate banker, made unauthorized withdrawals totaling nearly $440,000 from customer accounts between August and September 2023. Kyla A. Hartley, a part-time associate banker in Brooklyn, processed fraudulent check deposits and withdrawals that caused about $196,250 in losses.

• TD Bank: Harold Serenot, a former customer service representative, fraudulently obtained Paycheck Protection Program (PPP) funds in 2021 by falsely claiming to operate a business. Amalia Rivera, a teller and manager in Connecticut, accessed customer accounts without authorization, participating in impersonation schemes that cost TD approximately $120,000.

• PNC Bank: Maricela Galindo Celestino embezzled $105,926.90 by accessing accounts without permission and forging signatures.

• First National Bank Texas and First Financial Bank: Karen Lopez and Nikki Lynn Ward misappropriated at least $66,100 from customer accounts and bank vaults.

• Santander Bank: Kristin M. Sanguinetti, an ATM custodian, misappropriated approximately $51,800 from the branch she worked at.

In all these cases, the former bankers consented to the prohibition orders without admitting or denying the allegations.

Regulatory Response and Industry Implications

The OCC’s prohibition orders prevent the former bankers from participating in the affairs of specific banks, safeguarding financial institutions from further risk. The orders include provisions that allow the ban to be lifted if the individual obtains written consent from both the OCC and the relevant federal regulator.

These measures highlight the critical role of regulatory oversight in maintaining the integrity of the banking system. Banks must continuously monitor employee activities, strengthen internal controls, and use digital banking safeguards to reduce the risk of fraud and ensure customer trust.

Broader Economic and Customer Impacts

Fraud and misappropriation not only cause direct financial losses but also erode customer confidence and affect broader banking operations. For customers, incidents like these reinforce the importance of monitoring checking accounts, using secure digital banking platforms, and understanding the risks associated with loans, deposits, and credit services. For banks, strict adherence to compliance and effective risk management directly impacts reputation, profitability, and regulatory standing.

Closing Insights

The OCC’s actions serve as a reminder that strong internal controls, ethical practices, and regulatory compliance are essential for a stable banking system. Customers should remain vigilant over their accounts and utilize digital banking tools safely. Banks that proactively embrace transparency, fraud detection technology, and employee oversight are better positioned to maintain trust and foster economic stability.

• Regularly review account activity to detect unauthorized transactions early.

• Use digital banking alerts for deposits, withdrawals, and loan activity.

• Banks should invest in training and fraud prevention systems to protect both clients and their operations.

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