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UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.
_________________________________________
ON CERTIFICATION OF THE DEPARTMENT )
OF THE TREASURY-- OFFICE OF THE
)
COMPTROLLER OF THE CURRENCY
)
)
In the Matter of a Notice to
)
Prohibit Further Participation
)
Against MARIAN L. BUTLER,
)
)
Former Employee,
)
CoreStates Financial (now First Union)
)
PHILADELPHIA, PENNSYLVANIA
)
_________________________________________ )
DOCKET NO. OCC-AAEC-02-07
FINAL DECISION
This is an administrative proceeding pursuant to the Federal Deposit
Insurance Act (AFDI Act@) in which the Office of the Comptroller of the
Currency of the United States of America ("OCC") seeks to prohibit the
Respondent, Marian L. Butler ("Respondent"), from further participation in
the affairs of any financial institution because of her conduct as an employee
of CoreStates Financial (now First Union) (the ABank@), a national banking
association. Under the FDI Act, the OCC may initiate a prohibition
proceeding against a former employee of a national bank, but the Board
must make the final determination whether to issue an order of prohibition.
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Upon review of the administrative record, the Board issues this Final
Decision adopting the Recommended Decision of Administrative Law Judge
Ann Z. Cook (the AALJ@), and orders the issuance of the attached Order of
Prohibition.
I. STATEMENT OF THE CASE
A. Statutory and Regulatory Framework
Under the FDI Act and the Board's regulations, the ALJ is responsible
for conducting proceedings on a notice of charges. 12 U.S.C. § 1818(e)(4).
The ALJ issues a recommended decision that is referred to the deciding
agency together with any exceptions to those recommendations filed by the
parties. The Board makes the final findings of fact, conclusions of law, and
determination whether to issue an order of prohibition in the case of
prohibition orders sought by the OCC. Id.; 12 C.F.R. § 263.40.
The FDI Act sets forth the substantive basis upon which a federal
banking agency may issue against a bank official or employee an order of
prohibition from further participation in banking. To issue such an order,
the Board must make each of three findings: 1) that the respondent engaged
in identified misconduct, including a violation of law or regulation, an
unsafe or unsound practice or a breach of fiduciary duty; 2) that the conduct
had a specified effect, including financial loss to the institution or gain to the
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respondent; and 3) that the respondent=s conduct involved either personal
dishonesty or a willful or continuing disregard for the safety or soundness of
the institution. 12 U.S.C.§ 1818(e)(1)(A)-(C).
An enforcement proceeding is initiated by filing and serving on the
respondent a notice of intent to prohibit. Under the OCC's and the Board's
regulations, the respondent must file an answer within 20 days of service of
the notice. 12 C.F.R. §§ 19.19(a) and 263.19(a). Failure to file an answer
constitutes a waiver of the respondent's right to contest the allegations in the
notice, and a final order may be entered unless good cause is shown for
failure to file a timely answer. 12 C.F.R. §§ 19.19(c)(1) and 263.19(c)(1).
B. Procedural History
On August 6, 2002, the OCC issued a Notice initiating an
enforcement action that sought an order of prohibition due to Respondent's
actions in stealing between $10,000 and $15,000 from the Bank while
working in the cash processing unit. The Notice directed Respondent to file
an answer within 20 days, and warned that failure to do so would constitute
a waiver of her right to appear and contest the allegations. The record shows
that the OCC made numerous efforts to serve the Notice on Respondent.
The initial copy of the Notice was mailed certified mail, return receipt
requested, on August 7, 2002, but the receipt was never returned. A second
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copy of the Notice was served on Respondent by overnight delivery on
September 11, 2002. The courier service returned the package as "refused"
by the addressee. A process server was dispatched to Respondent's address
on September 21, 2002, but was told that there was no one by Respondent's
name at that address. On October 1, 2002, Enforcement Counsel sent two
more copies to Respondent's home address, one by certified mail, return
receipt requested, and one by courier, this time not indicating that the
package was from the OCC. Although no return receipt was returned for the
copy sent by certified mail, an individual with Respondent's last name
signed for the couriered copy on October 4, 2002.1 Nonetheless,
Respondent failed to file an answer within the 20-day period specified in
that copy of the Notice. On November 27, 2002, the ALJ issued an Order to
Show Cause directing Respondent to submit an answer by December 16,
2002, and demonstrate good cause for not having done so previously. The
record reflects that the Order was delivered by courier to Respondent's
address and signed for on December 2, 2002. Respondent did not respond
to the Order to Show Cause and has never filed an answer to the Notice.
1
The person who signed for the package did not provide a first name.
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II. DISCUSSION
The OCC's Rules of Practice and Procedure set forth the
requirements of an answer and the consequences of a failure to file an
answer to a Notice. Under the Rules, failure to file a timely answer
"constitutes a waiver of [a respondent's] right to appear and contest the
allegations in the Notice." 12 C.F.R. § 19.19(c). If the ALJ finds that no
good cause has been shown for the failure to file, the judge "shall file . . . a
recommended decision containing the findings and the relief sought in the
notice." Id. An order based on a failure to file a timely answer is deemed to
be issued by consent. Id.
The record establishes that the OCC used methods "reasonably
calculated to give actual notice" in its efforts to notify Respondent of the
pendency of this case. 12 C.F.R. § 19.11(c)(2)(v). Nonetheless, Respondent
failed to file an answer despite notice to her of the consequences of such
failure, and also failed to respond to the ALJ's Order to show cause.
Respondent’s failure to file an answer constitutes a default.
Respondent's default requires the Board to consider the allegations
in the Notice as uncontested. The Notice alleges, and the Board finds, that
Respondent stole between $10,000 and $15,000 in cash from the Bank while
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working as a temporary employee in the cash processing unit.2 This conduct
meets all the criteria for entry of an order of prohibition under 12
U.S.C. § 1818(e). It is a violation of law and an unsafe or unsound practice
for a bank employee to steal bank funds. Respondent’s actions caused gain
to herself as well as loss to the Bank. Finally, Respondent’s actions
involved personal dishonesty in taking property not her own. The
requirements for an order of prohibition having been met, the Board has
determined that such an order will issue.
CONCLUSION
For these reasons, the Board orders the issuance of the attached Order
of Prohibition.
By Order of the Board of Governors, this 13 day of February, 2003.
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
(signed) Jennifer J. Johnson
Jennifer J. Johnson
Secretary of the Board
2
Respondent was an employee of Manpower Temps, and was contracted from
Manpower Temps to work at the Bank. The Board finds that this qualifies her as an
institution-affiliated party within the meaning of 12 U.S.C § 1818(u)(1), in that she was
an "employee . . . of, or agent for, an insured depository institution."