BofI Holding in San Diego is disputing a media report that said the company is the subject of a federal money-laundering probe stemming from allegations made by a former bank auditor.
The New York Post reported on Friday that Justice Department officials are investigating whether the $8.2 billion-asset holding company for Bank of Internet USA violated anti-money-laundering laws by filing incorrect call reports to hide loans made to foreign nationals.
Justice Department officials have interviewed at least one former bank employee, the Post reported, citing unnamed sources. The Office of the Comptroller of the Currency, the Securities and Exchange Commission and the Treasury Department are all involved in the investigation, the Post reported. None of the agencies commented for the Post’s story.
BofI said in a press release that banks are not required to obtain the tax ID numbers of nonresident aliens who are not engaged in a trade or business in the U.S.
“This allegation is inexplicable given that applicable law does not require tax identification numbers of nonresident aliens who are not engaged in a trade or business in the United States,” BofI Holding said in the release. “The Company has received no indication of, and has no knowledge regarding, such purported money laundering investigation.”
Allegations of fraud at BofI Holding were first raised in an employment lawsuit filed in October 2015 against the bank by former auditor Charles Erhart, BofI said. A federal judge last year dismissed the lawsuit.
The company later hired an outside law firm to investigate the claims and “found no support” for the allegations that the company or management “engaged in wrongdoing or acts of fraud or impropriety,” BofI said in the release. BofI also noted that it has undergone two full regulatory examinations since the lawsuit was filed. CEO Greg Garrabrants also hosted a conference call after the lawsuit was filed to dispute the allegations.
BOFI’s stock was down 4.9% late Friday, to $26.23.