Former CenTrust Chairman Fined $3.2 Million
WASHINGTON -- The Office of Thrift Supervision has slapped former CenTrust Bank chairman David Paul with a $3.2 million fine for violating orders to limit and disclose his spending.
The OTS on Wednesday charged Mr. Paul with five violations of enforcement orders issued in October 1990 and June 1991. He has been ordered to pay the fine by Sept. 20, but may within 20 days request a hearing to appeal the charges.
Among the OTS allegations: Mr. Paul ignored a freeze on his assets and transferred $50,000 to a law firm, Neal & Harwell, and $200,000 to an account in Israel.
He also was said to have defied orders to file financial statements and to post security by Nov. 1.
Thrift regulators seized Miami-based CenTrust in February 1990, and charged last October that Mr. Paul manipulated the $8.2 billion-asset thrift for personal gain. The failure is expected to cost taxpayers $1.7 billion. The OTS wants to ban Mr. Paul from the banking industry and collect $30.8 million in restitution.
A Civil Money Penalty
The OTS also announced a $6 million civil money penalty against a former New Jersey thrift officer and his wife, whom the agency accused of filing false and misleading documents.
Robert K. Hartmann, a former director and general counsel for Polifly Savings and Loan Association, New Milford, and his wife Patricia, were accused of hiding their 25.3% interest in Changebridge East Inc., which borrowed $26 million from Polifly.
Polifly lost $6 million on the loan, the OTS charged.
The two were ordered to pay the fine by Sept. 27, unless they first request a hearing to challenge it.