Independent Counsel Nelson Werner onFriday filed the third amended complaint, with 19 different causes of action .
Thecomplaint ranges from negligence, breach of duty of care, gross negligence, breach of fiduciary duties, breach of duty of loyalty, embezzlement. Conversion , fraud , intentional misrepresentation, intentional concealment , conspiracy to commit fraud, violation of the Financial Institution Act and breach of promissory note among others.
The complaint named former officers and directors of the defunct bank in the suit.
The 60-page complaint stated that these officers and directors engaged in a “ systematic and purposeful scheme consisting of insider loans, self dealing, embezzlement, misappropriation of corporate opportunity and fraud.”
These acts, the complaint said resulted in the financial collapse of the bank and the loss of the depositors’ money.
Named defendants were Timothy Taunton former president of the bank; Franny Reklai, representative of the Estate of Johnny Reklai who was formerly the chairman of the PSB Board of Directors; Jay Goble, former Executive Vice President , treasurer and director of the bank; Deborah Rengiil , former vice president of human resources for the bank; Margo Llecholch, former vice presidentand compliance officer for the bank.
The other named defendants are Emory Mesubed, Melwert Tadao, Eileen Midar, Gavin Barnes, Tadao Ngotel and Harry Fritz.
The complaint said that the officers and directors converted to their personal use and possession the sum of at least $16,000.000.
The complaint further added that the bank officers and directors acquired credits or loans from the bank beyond their ability to repay and with the intention of not paying the loan.
It is further stated in the complaint that the defendants failed to capitalize the bank and that the bank was self- capitalized through extensionbank credit
The moneyto insiders for the purpose of buying shares in the bank.
“Plaintiff is informed and believes that the bank was a mere sham organized and operated as the alter ego of the defendants in this action, and for their personal benefit and advantage.
PSBwas placed into receivership Nov. 7, 2006by Palau’s Financial Institutions Commission.
Pacific Savings Bank was the first locally owned bank in Palau and is believed to have more than 7,000 customers and more than US$20 million in deposits.
Several businesses including schools, tour groups and hotels that had their money in the bank are now in murky waters.
Several depositors have recovered their savings,
