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Regulatory Sanctions

Bank of Internet, CEO, Investigated for Money Laundering - DOJ

March 31, 2017

Justice Department and other federal agencies are investigating the Bank of Internet and its CEO since 2007, Gregory Garrabrants, for reportedly filing incorrect quarterly Consolidated Report of Condition and Income, or ‘call reports’ that, among other things, disclose loans made to foreign nationals.  


According to the NYPost, those charges came out in a lawsuit, filed in 2015 by a Houston pension fund, that claimed the defendants had “misrepresented the risks of investing” with it. In the suit, BofI is alleged to have filed incorrect call reports by failing to disclose to the OCC that it had made as many as 200 loans to foreign Nationals without requiring them to provide Tax ID Numbers, as required under the USA Patriot Act and the Bank Secrecy Act.


At this point in time, neither the bank – which holds $6.6 billion in deposits - nor Garrabrants has been accused of any criminal activity.


The Office of the Comptroller of the Currency, the SEC and the Treasury Department are also taking part in the investigation.