SAN FRANCISCO -- A federal grand jury has indicted an officer of the former Central Bank System, Walnut Creek, Calif., on criminal charges stemming from an alleged loan fraud scheme.
The five-count indictment of Cynthia Lou Weir, a former Central Bank assistant vice president, is part of a broader investigation of the bank's role as a broker for uncollectable auto loans bought from finance companies in the Southwest.
The bank is suspected of buying the loans at a discount and then reselling them at full price without telling buyers of their riskness according to news reports. The probe's main target reportedly is Central's former chief executive officer, Michael G. Rafton. A spokesman for Mr. Rafton has denied he did anything wrong.
Central, which had $1.3 billion in assets, lost more than $72 million in 1988 and 1989 and was sold to French-owned Bank of the West in 1990.