Each depositor insured to at least $250,000 per insured bank



Home > Regulation & Examinations > Bank Examinations > FDIC Enforcement Decisions and Orders




FDIC Enforcement Decisions and Orders

ED&O Home | Search Form | Text Search | ED&O Help


{{5-31-95 p.C-3968}}
   [11,149] In the Matter of Richard A. Benjes, Sylvia State Bank, Sylvia, Kansas, Docket No. FDIC-93-093e (3-14-95).

   [.1] Prohibition—Participation in Conduct of Affairs
   [.2] Prohibition—Exercise of Voting Rights
   [.3] Prohibition—Specified Legal Services Permitted

In the Matter of
RICHARD A. BENJES,
individually, and as chairman
of the board of directors, person
participating in the conduct
of the affairs and/or
institution-affiliated party of
SYLVIA STATE BANK
SYLVIA,KANSAS
(Insured State Nonmember Bank—In
Receivership)
ORDER OF PROHIBITION FROM
FURTHER PARTICIPATION

FDIC-93-93e

   Richard A. Benjes ("Respondent"), has received a NOTICE OF INTENTION TO PROHIBIT FROM FURTHER PARTICIPATION ("NOTICE") issued by the Federal Deposit Insurance Corporation ("FDIC") detailing the unsafe or unsound banking practices for which an ORDER OF PROHIBITION FROM FURTHER PARTICIPATION ("ORDER") may issue, and has been advised of the right to a hearing on the alleged charges under section 8(e) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(e) (1982), the FDIC's Rules of Practice and Procedure, 12 C.F.R. Part 308. Having waived those rights, Respondent entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER OF PROHIBITION FROM FURTHER PARTICIPATION ("CONSENT AGREEMENT") with a representative of the Legal Division of the FDIC, whereby solely for the purpose of this proceeding and without admitting or denying any unsafe or unsound banking practices, Respondent consented to the issuance of an ORDER by the FDIC.
   The FDIC considered the matter and determined it had reason to believe that:
   (a) The Respondent has participated in unsafe or unsound banking practices as an institution-affiliated party of Sylvia State Bank, Sylvia, Kansas ("Bank");
   (b) By reason of such practices, the Bank suffered substantial financial loss; and
   (c) Such practices demonstrate the Respondent's continuing disregard for the safety or soundness of the Bank.
   The FDIC further determined that such practices demonstrate the Respondent's unfitness to serve as a director, officer, person participating in the conduct of the affairs or as an institution-affiliated party of the Bank, any other insured depository institution, or any other agency or organization enumerated in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e)(7)(A).
   The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

{{5-31-95 p.C-3969}}

ORDER OF PROHIBITION FROM FURTHER PARTICIPATION

   [.1] 1. Richard A. Benjes is hereby, without the prior written approval of the FDIC and the appropriate Federal financial institutions regulatory agency, as that term is defined in section 8(e)(7)(D) of the Act, 12 U.S.C. § 1818(e)(7)(D), prohibited from:

       (a) participating in any manner in the conduct of the affairs of any financial institution or organization enumerated in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e)(7)(A);

    [.2] (b) soliciting, procuring, transferring, attempting to transfer, voting, or attempting to vote any proxy, consent or authorization with respect to any voting rights in any financial institution enumerated in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e)(7)(A);
       (c) violating any voting agreement previously approved by the appropriate Federal banking agency; or
       (d) voting for a director, or serving or acting as an institution-affiliated party.

   [.3] 2. Notwithstanding the provisions of paragraph 1(a) and (d) of this ORDER, Respondent shall not be prohibited from providing legal services as an attorney on a contract basis on behalf of any financial institution enumerated in section 8(e)(7)(A)(i) through (iv) of the Act, 12 U.S.C. § 1818(e)(7)(A)(i) through (iv), ("financial institution"), in connection with the collection of any loan, including the foreclosure of any mortgage; the examination of any abstract of title; or the representation of any estate, trust, or conservatorship but only where Respondent represents the estate, trust or conservatorship and the financial institution is only serving as a fiduciary for the estate, trust or conservatorship, provided, however, in each instance, prior to engaging in any such activity, Respondent shall:
       (a) advise any such financial institution of the existence and contents of this ORDER prior to undertaking the representation;
       (b) notify the Regional Director of the FDIC's Kansas City Regional Office of the name and address of any such financial institution and the nature of the legal services to be provided prior to undertaking such services;
       (c) be independent with respect to any such financial institution; and
       (d) be prohibited from providing legal services for any such financial institution with respect to the institution's management policies or practices, internal operations, or supervisory or compliance matters.

   3. For purposes of this ORDER, Respondent shall be considered "independent" with respect to a financial institution if:
       (a) Respondent is not an officer or employee of any subsidiary of the financial institution, or any of its affiliated organizations;
       (b) Respondent does not own, directly or indirectly, more than 5 percent of the outstanding voting stock of the financial institution, any subsidiary of the financial institution, or any of its affiliated organizations;
       (c) Respondent is not related by blood, marriage or common financial interest to any individual who is an officer or director of the financial institution or who otherwise is not independent with respect to the financial institution because such individual does not satisfy the criteria described in this paragraph concerning independence. The phrase "common financial interest" means any relationship involving individuals who, directly or indirectly, (1) have an ownership interest in a common enterprise, or (2) are in a debtor/ creditor relationship. "Common financial interest" does not include common ownership of publicly traded securities registered with the Securities and Exchange Commission, unless the individuals involved have filed or are required to file a statement under 15 U.S.C. § 78p; and
       (d) Respondent is not indebted to the financial institution, directly or indirectly (including the indebtedness of any "related interest" of Respondent, as defined in 12 C.F.R. § 215.2(m), and of any member of Respondent's "immediate family," as defined in 12 C.F.R. § 215.2(g)), in an amount exceeding 5 percent of the financial institution's Tier 1 capital and allowance for loan and lease losses.

   4. This ORDER will become effective 10 days after its issuance. The provisions of this ORDER will remain effective and enforceable except to the extent that, and until {{5-31-95 p.C-3970}}such time as, any provision of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated this 14th day of March, 1995.
   Pursuant to delegated authority.

ED&O Home | Search Form | Text Search | ED&O Help

Last Updated 6/6/2003 legal@fdic.gov