Pioneer in N.Y. issues warning on potential client fraud

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Pioneer Bancorp in Albany, N.Y., has disclosed exposure to potential fraud involving a business customer.

The $1.4 billion-asset company said in a Wednesday regulatory filing that the alleged fraud involved transactions made in the current quarter. The transactions involve deposit and lending relationships with the unnamed client.

Pioneer said the client has $16 million in commercial loans, secured by business assets. The amount represents about 45% of a participation loan where Pioneer was the originating lender.

Pioneer’s exposure also includes about $19 million of deposit activity.

“The company continues to investigate this matter to determine the potential exposure,” the filing said. Pioneer “is pursuing all available sources of recovery and other means of mitigating the potential loss.”

Pioneer said it is working with the law enforcement authorities in connection with the matter, adding that the investigation could limit the information it shares going forward.

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