Bank tipped off to possible abuse
By Rick Daysog
Advertiser Staff Writer
By Rick Daysog
American Savings Bank officials were warned about the questionable behavior of a bank employee before she allegedly stole more than $600,000 from an elderly customer.
A Jan. 28, 2005, internal bank memo, obtained by The Advertiser, shows that by October 2004 a bank vice president and two branch managers knew of complaints that Marilyn De Motta, a supervisor at the Hawai'i Kai branch, might be taking advantage of her customer, Ada Lim.
The bank did not fire De Motta until February 2005, after she had used Lim's money to buy a Waipahu condo and set up a $212,000 account for De Motta's father.
The memo, from Aimee Ogata, manager of American Savings' Liliha branch, represents the latest challenge to the bank's version of events.
Last month the 91-year-old Lim sued American Savings, Hawai'i's third largest financial institution, alleging De Motta stole $688,000 from her.
American Savings CEO Constance Lau responded to the suit, saying the allegations were "outrageous." Lau said the bank "terminated (De Motta) promptly, following our own internal investigation."
However, in the memo, Ogata said she urged the Hawai'i Kai branch manager in September or October 2004 to reprimand and investigate De Motta.
"I warned him that he should be certain that she's not soliciting other ASB customers and abusing her position at the bank," Ogata wrote. "I advised him that he should take actions to reprimand her ... and to investigate her activity since she is creating suspicion with so many people outside our bank."
Ogata said she learned of De Motta's actions from an acquaintance who had been Lim's accountant.
When asked about the memo last week, American Savings attorney John Knorek said: "In retrospect, maybe somebody could have said, 'Maybe we should have looked further.' But at the time, you have to give credence to the manager's judgment and responsibility to say, 'I've looked into this, I told her to stop it, I've checked into her personal finances, there doesn't seem to be anything inappropriate at this time.' "
The Hawai'i Kai branch manager, Wilson Ho, ordered De Motta to stay away from Lim as soon as he learned De Motta was helping Lim with her taxes, bank attorneys said. But De Motta did not follow the orders.
The bank said it had no reason to suspect that De Motta was stealing money from Lim until January 2005.
De Motta said in an interview last month that Lim lent her the money. She blamed the bank for not adequately supervising her.
Ho declined to comment when contacted last week. Ogata, the author of the memo and Liliha branch manager, also declined to comment.
The bank's attorneys also noted that state Adult Protective Services officials conducted an investigation into Lim's case and found no evidence of abuse. An Adult Protective Services spokes-man said they cannot comment on investigations.
The FBI has questioned people involved in the case and American Savings said it is cooperating with the federal investigation.
A separate Aug. 2 lawsuit filed by Bert Corniel, American Savings' former security director, alleged that the bank attempted to cover up fraud cases. The bank responded that Corniel was a disgruntled former employee who was passed over for a promotion.
Bank experts say in cases involving the elderly, there is an extra burden on financial institutions to prevent fraud.
"Elderly customers are a customer class that is susceptible to being defrauded by bank employees and outsiders. That's why special care is needed," said Bert Ely, an Alexandria, Va.-based banking consultant who forecast the savings and loan crisis of the late 1980s.
American Savings attorneys said its employees are sensitive to the needs of the elderly. The attorneys said, however, they are not aware of any special training to deal with elderly issues.
Tom Tarter, a former president of the Bank of Los Angeles who now advises financial institutions on corporate governance issues, said the bank should have begun an investigation after it found out that De Motta was preparing Lim's taxes because the bank does not normally provide such services and because De Motta may not possess the required license or appropriate training as a tax preparer.
The bank said it took appropriate action based on the information it had at the time.
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|Timeline of Marilyn De Motta's dealings with Ada Lim
February 2004: American Savings Bank Hawai'i Kai operations supervisor Marilyn De Motta offers to help bank customer Ada Lim with her taxes and other financial matters. (2)
August 2004: Lim sells her Wahiawa commercial property, her main asset, for $1.4 million. De Motta is present at the closing. (2)
August 2004: De Motta instructs Lim to deposit the proceeds from the Wahiawa land sale, or about $688,000, into Lim's checking account at American Savings Bank. (2)
August 2004: American Savings Bank Liliha branch manager Aimee Ogata receives a phone call from Lim's accountant complaining about De Motta's conduct. The accountant said De Motta made errors in the filing of Lim's taxes. (1)
August 2004: Ogata calls De Motta's supervisor, Wilson Ho, who said he was not aware that De Motta was working as a tax preparer and said he would talk to her. (1)
August-September 2004: Ogata speaks with Bob Costa, then vice president of branch operations for American Savings Bank, about De Motta. Costa checks with the bank's human resources department to see if it's a conflict of interest to prepare a customer's taxes. Human resources says it is not. (1)
August-September 2004: Lim's checking account balance drops by about $561,000. (2)
September 2004: De Motta purchases a Waipahu condominium using $110,000 of Lim's money, Lim alleges in her lawsuit. (2)
September 2004: Dennis Kohara, Lim's accountant, approaches Ogata during a high school football game, saying "something fishy" is going on between Lim and De Motta. (1)
September 2004: Ogata calls De Motta's supervisor again and recommends that he reprimand De Motta and begin an investigation. The supervisor said he told De Motta to stay away from Lim. (1)
October 2004: De Motta prepares a written statement saying Lim loaned her $304,000 at a 2 percent interest rate. (2)
December 2004: De Motta deposits $212,000 of Lim's money into a savings account at American Savings in her father's name, Bernadino Pidong. (2)
January 2005: American Savings' code of conduct committee begins an investigation of De Motta. (5)
February 2005: American Savings sends De Motta, two human resources employees and a notary to Lim's house bearing a bouquet of flowers, cookies and mochi crunch. Bank employees ask Lim to verify the loan document made by De Motta and asked Lim to re-sign the document. Lim signs the documents. American Savings said the visit was part of its investigation of De Motta. (2)
February 2005: American Savings fires De Motta. (5)
March 2005: FBI begins an investigation, according to De Motta. (3)
Aug. 2, 2006: Lim and Bert Corniel, former American Savings security director, file separate lawsuits alleging that the bank tried to cover up fraud.
August 2006: FBI executes a search warrant and seizes Corniel's computer at American Savings' downtown headquarters, according to Corniel's attorney John Perkin.
Aug. 16, 2006: American Savings Bank CEO Constance Lau, responding to two lawsuits, said allegations that the bank covered up a possible theft were "outrageous." (4)
Aug. 22, 2006: American Savings files a legal response to the Corniel and Lim lawsuits, saying Corniel is a disgruntled former employee who didn't get the promotion he wanted and Lim told the bank in writing she voluntarily loaned her money to De Motta and had no complaint with her.
(1) Jan. 28, 2005, memo from Aimee Ogata to Bert Corniel, former head of bank security, copied to Garett Cosner, bank vice president.
(2) Ada Lim's Aug. 2 lawsuit file in state circuit court.
(3) Interviews with Marilyn De Motta in August.
(4) Constance Lau statement on Aug. 16
(5) American Savings court filing on Aug. 22.
Correction: American Savings Bank CEO Constance Lau, responding on Aug. 16 to two lawsuits, said allegations that the bank covered up a possible theft were "outrageous." Information with the timeline in a previous version of this story was incomplete.
Reach Rick Daysog at email@example.com.