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The Honolulu Advertiser
Posted on: Thursday, August 17, 2006

Bank's CEO says it acted properly

By Rick Daysog
Advertiser Staff Writer


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Constance Lau, chief executive officer of American Savings Bank and its parent Hawaiian Electric Industries Inc., said yesterday the bank did not cover up allegations of misdeeds by bank employees.

"One (allegation) in particular needs to be addressed in the most emphatic terms," said Lau, in a written statement responding to charges made in two lawsuits filed earlier this month. "This bank did not in any way, shape or form cover up anything,"

The separate lawsuits claim American Savings officials tried to cover up theft, including one case in which a bank employee allegedly took several hundred thousand dollars from a 91-year-old customer.

The FBI has questioned people involved in the lawsuits, and American Savings said Tuesday it is fully cooperating with the FBI investigation.

"American Savings Bank has been the target of a number of outrageous allegations in two separate but apparently coordinated lawsuits filed on Aug. 2," Lau said. "One claim was made regarding an employee the bank terminated promptly, following our own internal investigation."

American Savings, established in 1925, is the state's third largest financial institution, with $6.7 billion in assets.

The lawsuits filed by Bert Corniel, a former American Savings security director, and bank customer Ada Lim, 91, alleged that a manager at a bank branch took $600,000 from Lim and used part of the money to purchase a condominium.

Corniel, in his suit, said he investigated the Lim case, but bank officials told him not to report the fraud to federal regulators as required by law.

Lau responded, saying, "We have ... never stopped anyone from filing a required report to a government agency. In our business, integrity is our foundation and we would not have been able to operate in Hawai'i for more than 80 years without it.

"I have directed our attorneys to take every appropriate legal step to respond to these unfounded allegations despite the apparent orchestrated and unfair attempts by the plaintiffs to sow fear and uncertainty among our customers and stakeholders. At the end of the day, I expect the bank to be fully exonerated."

Corniel's lawsuit charges that Lau asked him to "recharacterize" the bank's fraud losses as "potential losses" in his reports to federal regulators.

"The ... claim came from a disgruntled former employee who made a number of accusations against American Savings Bank and me personally," Lau said. "The allegations in both these suits are untrue."

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.