Banker Sentenced to Prison for Loan Scheme
M&T Bank has agreed to pay $485,000 and change its lending policies to settle a lawsuit that accused the Buffalo, N.Y., company of racial discrimination in making mortgage loans.September 1
The Federal Reserve Board has approved the merger of M&T Bank in Buffalo, N.Y., and Hudson City Bancorp in Paramus, N.J., after more than three years of delay. The approval came on the day the regulator had set as a deadline to announce its verdict on the deal.September 30
A former M&T Bank executive was sentenced to 39 months prison time for leading a fraudulent scheme involving about $5.3 million in small-business loans.
Michael A. Whipple, who was a vice president of business banking, was sentenced on Wednesday in U.S. District Court for the Western District of New York, the Buffalo News reported. Whipple was accused of using fraudulent means to approve about $5.3 million in loans to companies he wanted to help.
Whipple had worked at the $99 billion-asset M&T for about 20 years and was responsible for a $150 million loan portfolio. The bank terminated his employment in 2013 and in July he admitted to the scheme, prompting an FBI probe.
U.S. District Judge Elizabeth A. Wolford admitted in her ruling that she case puzzled her, as Whipple never lined his own pockets.
"I'm having trouble making sense of this," Wolford said. "I'm skeptical that your motives were truly altruistic."
At the sentencing, Whipple apologized to the $97 billion-asset Buffalo, N.Y., company, which he will have to reimburse for losses related to the fraudulent loans. Whipple described his scheme as a "well-intentioned but misguided effort to help" local companies.