Fax Could Help OCC

10/17/07

The case was brought by the Office of the Comptroller of the Currency (OCC), which "[seeks] a $250,000 fine and wants to bar Loumiet from representing any federally insured financial institution," says an article on Law.com. OCC special counsel Lee Strauss has also "charged Loumiet...with conflict of interest, as well as suppressing evidence and causing general harm to the bank."

Auditors questioned "if Hamilton officials had illegally swapped newly downgraded Russian loans for junk Latin American and Asian debt at above-market prices to hide a $3.1 million loss."

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To help Strauss's case, the OCC attorney is using a recently discovered 2000 fax transmission, which Strauss has described "as the most telling sign of intentional wrongdoing." The fax "shows Hamilton Bank general counsel J. Reid Bingham confirming an adjusted price trade of a Moscow loan for Hong Kong debt with a West Merchant Bank of London official."

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"Adjusted price trades are illegal transactions designed to hide losses from auditors and regulators," said Strauss. "This recklessness is not from a newly minted attorney caught in a rookie mistake. He is a sophisticated, experienced attorney."

However, Loumiet's attorney, Alan Greer, argued that "Loumiet is being made a scapegoat for poor OCC oversight."

"This isn't even 20-20 hindsight. It's 20-10," said Greer.