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UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.
In the Matter of
William R. Kahler,
An Institution-Affiliated Party of
Primebank,
LeMars, Iowa
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Docket No. 05-03 1-G-I
Notice of Suspension and Prohibition
Issued Upon Consent Pursuant to
Section (8)(g)(l)(A) of the
Federal Deposit Insurance Act, as
Amended
WHEREAS, pursuant to Section 8(g)l)(A) of the Federal Deposit Insurance Act,
as amended (the "FDI Act") (12 U.S.C.
5 1818(g)(l)(A)), the Board of Governors of the
Federal Reserve System (the "Board of Governors") issues this Consent Notice of
Suspension and Prohibition (the "Consent Notice") against William R. Kahler ("Kahler")
an institution-affiliated party, as defined in Section 3(u) of the FDI Act (12 U.S.C.
5
1813(u)), of Primebank, LeMars, Iowa (the "Bank"), a state-chartered bank that is a
member of the Federal Reserve System;
WHEREAS, Kahler was charged in a criminal complaint, dated August 25,2005
(Case No. 05-MJ-0140), filed in the United States District Court for the Northern District
of Iowa, with two felony violations of 18 U.S.C.
5 1005 involving making false entries in
the books and records of a bank, and participating, sharing in, or receiving money or
benefits through a loan, with the intent to defraud the bank or deceive its officers or the
FDIC;
WHEREAS, on September 20,2005, a Grand Jury in the United States District
Court for the Northern District of Iowa (Western Division) filed an indictment (the
"Indictment") charging that Kahler, in or about April 2003, acting in his capacity as a
loan officer of Iowa-Nebraska State Bank ("I-N Bank"), a financial institution insured by
the Federal Deposit Insurance Corporation (the "FDIC"), committed two violations of 18
1r.s.c.g 100s;
WHEREAS, Count 1 of the Indictment charges that Kahler knowingly made a
false entry in the books, reports or statements of the I-N Bank with the intent to defraud
the I-N Bank, and deceive the I-N Balk and its officers, the FDIC, and agents or
examiners of the FDIC; and Count 2 of the Indictment charges that Kahler knowingly,
and with the intent to defraud the I-N Bank, participated, shared in, or received, directly
or indirectly, money, profit, property or benefits through a transaction, loan, commission,
contract, or other act of the I-N Bank;
WHEREAS, the violations of 18 U.S.C. $1005 set forth above are crimes
involving breach of trust or dishonesty that are punishable by imprisonment for a term
exceeding one year under Federal law within the meaning of Section 8(g)(l)(A) of the
FDI Act (12 U.S.C.
5
1818(g)(l)(A));
WHEREAS, Kahler is currently employed as a loan officer of the Bank and
Kahler's continued service may pose a threat to the interests of the Bank's depositors
because the Indictment charges that Kahler was "acting in the role of loan officer" when
he committed the felony violations of 18 U.S.C. $ 1005, and Kahler's current position as
a loan officer poses the same risks to the Bank as the risks posed during the alleged
criminal misconduct;
WHEREAS, Kahler's continued service as a loan officer of the Bank may
threaten to impair public confidence in the Bank in that the criminal charges described
above have generated adverse publicity in the Bank's market area, and Kahler's jury trial,
scheduled to commence December 5, 2005 in U.S. District Court in Sioux City, Iowa,
approximately 25 miles from LeMars, Iowa, is likely to generate additional adverse
publicity regarding Kahler's alleged commission of fraudulent acts as a loan officer at IN Bank and his current employment as a loan officer at the Bank;
,
WHEREAS, by affixing his signature hereunder, Kahler has consented to
the issuance of this Consent Notice by the Board of Governors, has agreed to comply
wlth each and every provision of this Consent Notice, and has waived any and all rights
he might otherwise have pursuant to 12 U.S.C. fj 1818 or 12 C.F.R. Part 263, or
otherwise: (a) to an informal hearing before the Board of Governors pursuant to Section
8(g)(3) of the FDI Act (12 U.S.C. fj 1818(g)(3)), and Section 263.72 of the Rules of
Practice for Hearings of the Board of Governors (the "Rules of Practice") (12 C.F.R.
fj 263.72); (b) to obtain judicial review of this Consent Notice or any provision hereof;
and (c) to challenge or contest in any manner the basis, issuance, validity, effectiveness
or enforceability of this Consent Notice or any provision hereof.
NOW THEREFORE, without this Consent Notice constituting an
admission by Kahler of any allegation made or implied by the Board of Governors, the
Board of Governors, pursuant to Section 8(g)(l)(A) of the FDI Act (12 U.S.C.
fj 1818(g)(l)(A)), and Section 263.71 of the Rules of Practice, hereby issues this Consent
Notice and orders that:
2.
Kahler is hereby suspended from his position as an employee of
the Bank.
2.
Kahler is hereby prohibited from participating in any manner in the
conduct of the affairs of the Bank.
3.
The suspension and prohibition set forth above shall remain in
effect until the Indictment referred to in the third WHEREAS
clause above (or in any superseding complaint, information or
indictment containing charges of a similar nature) is finally
disposed of, or until terminated by the Board of Governors.
4.
A copy of this Consent Notice shall be served upon the Bank.
5.
Any violation of this Consent Notice shall subject Kahler to
sanctions under Section 8 of the FDI Act (12 U.S.C
6.
5 1818).
All communication regarding this Consent Notice shall be
addressed to:
a.
Richard M. Ashton
Deputy General Counsel
Board of Governors of the Federal Reserve System
2oth& C Sts., NW
Washington, D.C. 2055 1
b.
William R. Kahler
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By Order of the Board of Governors of the Federal Reserve System,
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effective thi? *day of October, 2005.
Board of Governors of the
Federal Reserve System
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William R. ~ b l e r