FOUR major shareholders of Bank of Saipan may have illegally received $3.587 million from the bank, according to an independent accountant’s report.
This amount should be returned to the bank, Burger & Comer, P.C. said in its March 21 report submitted to the Superior Court.
The report also revealed that Tinian Dynasty Hotel & Casino borrowed $5.449 million from the bank without the approval of the bank’s board of directors.
“The only evidence of approval…is the signed commitment letter executed by (then bank CEO) Tom Aldan,” the report said.
Variety was told yesterday that the hotel’s general manager, Tom Liu, was “unavailable.”
“Bank of Saipan purchased 199,327 shares from JLH Pacific Trust and…Paul Calvo, Thomas J.M. Calvo and Edward M. Calvo for…$3,587,886. The checks were dated Dec. 3, 2001,” the report said.
Doug Montgomery, who was later indicted for defrauding the bank, then received four payments for stock, but the amount received was less than the amount paid to the four shareholders, the report said.
“It is unusual that the bank was involved in this transaction, since the transaction was to be between Mr. Montgomery and the shareholders. The bank (used) its own funds to fund the purchase of the shares, since it wrote checks prior to receiving payment from the purchaser,” the report said.
It added that the bank should collect the $488,000 Montgomery owed for the purchase of the shares. “If…(he) does not intend to or is unable to complete the transaction, the bank should void (it). Any funds paid to shareholders to purchase their shares should be returned.”
It was this same independent report that uncovered then bank chief executive officer and chairman Tom Aldan’s role in the alleged fraud, which resulted in his indictment. Besides Aldan and Montgomery, DuSean Berkich and Michael T. Wilson were also indicted.
Attorney Rodney J. Jacob of Calvo & Clark Law Office, the legal counsel of the bank’s board of directors, told Variety yesterday that there was “no basis” to investigate his clients.
“There is absolutely no basis for the allegations. It is frivolous,” Jacob said.
Jacob said the bank’s board of directors have already started “paying back” the money.
“The (board of directors are) going to ask the court to pay the money to the court directly because there are claims against those funds by third parties,” Jacob added.
He said the bank’s directors are not running from any obligations. Their action is to further protect the bank, he added.
The directors are aware of the independent audit’s report since they were the ones that hired Burger & Comer, Jacob said.
He said the money used to buy the shares came from “other investors and not from the bank.”
Jacob said the shareholders want to ensure the protection of those funds, and for the court to determine where those funds will go.
Attorney General Robert T. Torres told Variety on Friday that the report of the independent auditor “gives a serious basis” for a close review of the transactions involved.
In a separate interview, acting Commerce Secretary Fermin M. Atalig said it is still “premature” to say that the report had revealed “illegal transactions.”
“Until such time the judge has made the ruling, it’s premature to say anything about it,” Atalig said.
Attorney Randy Fennell, the court-appointed receiver of the bank, said he was “aware” of the report’s findings and was drafting his own report to Presiding Judge Edward Manibusan.
Fennel said there had been no repayments made by the four major shareholders.
