BANK of Saipan provided misleading statements to the CNMI government regarding its available funds intended for collaterization of deposits, according to acting Commerce Secretary Fermin M. Atalig.
Atalig said as a result of misleading information, approximately $3.5 million in government deposits was left unsecured.
The CNMI’s Government Deposit Security Act requires certain government deposits to be 100 percent collaterized, Atalig said in his report filed last week in Superior Court.
The bank, Atalig said, provided false or misleading information when certain government agencies made inquiry to the bank’s board of directors.
Calvo & Clark law firm, counsel for Bank of Saipan, Inc., was unavailable for comment yesterday.
The current financial statements of Bank of Saipan shows it has $5.39 million in U.S. government securities and $6.63 million in Commonwealth Development Authority guaranty on certain loans.
Documents indicated that the bank, through then acting president and chief executive officer Benigno R. Fitial, pledged the same securities last March and April to the Retirement Fund and Marianas Public Land Authority.
Atalig said the bank’s letter to the Retirement Fund demonstrated that the bank was offering the same $5.3 million in U.S. government securities and $6.6 million in CDA guaranteed loans to secure the Retirement Fund’s deposits totaling $5.57 million.
In the subsequent letter to MPLA, Atalig said the bank, through Fitial, offered the same funds as collateral for MPLA deposits in excess of $8 million.
There were also CNMI Treasurer deposits totaling $300,000.
“The grand total of all government deposits is $15,832,009—the total amount that is available for collaterization is $12,029,361. This leaves approximately $3.5 million in government deposits unsecured,” Atalig said.
He said such false information heightens his belief that there is a serious danger of fraud being perpetrated on the bank’s clients.
Atalig added that a continued receivership is the only remedy to protect the public and the depositors.
Variety tried but failed to reach Fitial for comment.
