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[¶5269] In the Matter of Roque De La Fuente II, and First International Bank,
Chula Vista, California, Docket No. 97-31e (4-18-03).
The denied Roque De La Fuente II's request for a stay pending review
of the Board of Director's decision and Order, issued pursuant to
section 8(e) of the Federal Deposit Insurance Act, 12 U.S.C.
§1818(e), removing him from First International Bank, Chula Vista,
California and prohibiting him from participating in the affairs of any
insured depository institution.
[.1] StayJudicial proceedingCommencement
The commencement of proceedings for judicial review shall not, unless
specifically ordered by the court, operate as a stay of any order
issued by the appropriate federal banking agency.
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[.2] StayRequirements
Petitions for a stay pending judicial review must satisfy four
criteria: (1) a likelihood that the petitioner will prevail on the
merits of the appeal; (2) that the petitioner will suffer irreparable
injury in the absence of a stay; (3) that other interested persons will
suffer no harm if a stay is granted; and (4) that a stay will not harm
the public interest.
[.3] StaySuccess on the Merits
FDIC finds Success on the merits of the appeal unlikely.
[.4] StayIrreparable Harm
The FDIC found that implementation of the order will not cause injury
to the respondent, other than economic loss.
[.5] StayHarm to Others and Public Interest
FDIC found respondent already caused significant harm to the bank and
would, if permitted to remain in the industry, serve as a continuing
threat to the bank, its depositors, and the FDIC's bank insurance
fund.
In the Matter of
ROQUE DE LA FUENTE II,
Individually and as anInstitution-affiliated party of
FIRST INTERNATIONAL BANK
CHULA VISTA, CALIFORNIA
(Insured State Nonmember Bank)
DECISION AND ORDER DENYING REQUEST FOR STAY
FDIC-97-31e
This matter is before the Executive Secretary of the Federal
Deposit Insurance Corporation ("FDIC"), upon the advice and
recommendation of the Assistant General Counsel (Trial Litigation), in
the absence of the Deputy General Counsel for Litigation, acting
pursuant to authority delegated by the Board of Directors
("Board") of the FDIC. Roque De La Fuente II ("Respondent")
has asked for a stay pending review of the Board's Decision and Order
("Order") dated November 21, 2000, issued pursuant to section
8(e) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C.
§1818(e), removing him from First International Bank, Chula Vista,
California ("Bank") and prohibiting him from participating in the
conduct of the affairs of any insured depository institution. On
November 24, 2000, Respondent filed an appeal with the United States
Court of Appeals for the Ninth Circuit, and oral argument was heard on
December 4, 2002. The Ninth Circuit has not yet issued a decision.
On March 26, 2003, Respondent, in correspondence to the FDIC's San
Francisco Regional Office, requested that the FDIC grant a full or
partial stay of the Order pending his appeal. On April 1, 2003,
Respondent's request was forwarded to the FDIC's Executive Secretary,
See 12 C.F.R. §308.23(c).1 On April 8, 2003,
the Executive Secretary received FDIC Enforcement Counsel's Response
to Respondent's Request for a Stay Pending Judicial Review.
Enforcement Counsel objected to Respondent's request for a stay
because he failed to establish any of the four factors necessary for a
stay to be granted. We agree and, as more fully set forth below, deny
Respondent's request.
[.1] A stay pending judicial review is an extraordinary action committed to
the discretion of the FDIC. Section 8(h)(3) of the FDI Act, 12 U.S.C.
§1818(h)(3), provides that the commencement of proceedings for
judicial review shall not, unless specifically ordered by the court,
operate as a stay of any order issued by the appropriate federal
banking agency. See 12 C.F.R. §308.41; In the
Matter of Stanley R. Hendreckson, FDIC Enforcement Decisions and
Orders ¶5238,
1 The cited regulation provides that
"[m]otions must be filed with the Administrative Law Judge, except
that following the finding of the recommended decision, motions must be
filed with the Executive Secretary for disposition by the Board of
Directors." It should be noted that on April 4, 2003, the Chairman
of the FDIC received from Respondent a letter seeking a stay of the
Board's Order in substantially the same terms as Respondent's March
26, 2003 letter to the FDIC's San Francisco Regional Office. All such
correspondence from Respondent is considered to be responded to by mean
of the present Decision and Order.
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A-2797-2998 (1996), 1996 WL 627770, at *1.
[.2] The FDIC has previously held that petitions for a stay pending judicial
review must satisfy four criteria to be granted; (1) a likelihood that
the petitioner will prevail on the merits of the appeal; (2) that the
petitioner will suffer irreparable injury in the absence of a stay; (3)
that other interested persons will suffer no harm if a stay is granted;
and (4) that a stay will not harm the public interest. See, e.g.,
In the Matter of Ronald J. Grubb, FDIC Enforcement Decisions and
Orders ¶8021, I-67, I-68 (1992), 1992 WL 813234, at *1.
Respondent's submission does not address even in the slightest fashion
any of the threshold requirements, alleging only that a stay should be
granted to "provide at least temporary relief from this nightmare
that First International Bank, its customers, my family and I have been
facing." This failure on Respondent's part to allege any of the
four criteria necessary to issue a stay, is sufficient basis alone to
deny Respondent's request. See, In the Matter of Frank E.
Jameson, FDIC Enforcement Decisions and Orders §5154, A-1542.26
(1990), 1990 WL 711220, at *2.
[.3] Nevertheless, in considering Respondent's request, we have examined
each of the four conditions that must be satisfied in order to grant a
stay. First, in view of the administrative record in the enforcement
proceeding, Respondent would be hard-pressed to demonstrate likely
success on the merits. The Board, in its Order, conducted a thorough
review of every aspect of the case,
1 The cited regulation provides that
"[m]otions must be filed with the Administrative Law Judge, except
that following the finding of the recommended decision, motions must be
filed with the Executive Secretary for disposition by the Board of
Directors." It should be noted that on April 4, 2003, the Chairman
of the FDIC received from Respondent a letter seeking a stay of the
Board's Order in substantially the same terms as Respondent's March
26, 2003 letter to the FDIC's San Francisco Regional Office. All such
correspondence from Respondent is considered to be responded to by mean
of the present Decision and Order.
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including Respondent's many
exceptions to the Administrative Law Judge's decision. The Board found
that the record provided overwhelming justification for Respondent's
removal from the banking industry and, in fact, concluded that several
of the underlying violations were alone sufficient to justify his
removal. Order at 28. Respondent has come forward now with nothing to
suggest a contrary outcome on appeal.
[.4] Second, in the absence of other information submitted with
Respondent's request, we can only assume that implementation of the
Order will not cause injury to Respondent other than economic loss.
This, as the Board has previously noted, is not sufficient basis to
grant a stay. See, In the Matter of Michael D. Landry and Alton
B. Lewis, FDIC Enforcement Decisions and Orders §5259, A-3093
(1999), 1999 WL 639568, at *2 ("Had Congress meant for stays to be
granted on the basis of such allegations, it would certainly not have
enacted the provision in the statute providing that a petition for
review does not automatically stay the Board's enforcement orders.
Accordingly, whatever Respondent's alleged irreparable injury through
loss of livelihood, the Board believes that Congress did not intend
that showing alone to be adequate to justify a stay."). See
also, Hendrickson, §5238, at A-2798, 1996 WL 627770,
at *2; In the Matter of Harold Hoffman, FDIC Enforcement
Decisions and Orders §5154C, A-1507 (1989), 1989 WL 609343, at *2.
[.5] Finally, the last two factorsharm to other parties and to the public
interestare considered together because they are interrelated. The
other parties affected are the Bank, its depositors and the FDIC.
Respondent was removed from the banking industry based on his serious
breaches of fiduciary duty and dishonest conduct as a banker. He has
already caused significant harm to the Bank and would, if he were
permitted to remain in the industry, serve as a continuing threat to
the Bank, its depositors and, ultimately, to the FDIC's bank insurance
fund. See Landry §5259, at A-3093; 1999 WL 639568, at *3.
Protection of the public interest is at the core of section 8(e), the
removal prohibition of the FDI Act, 12 U.S.C. §1818(e). A banker can
only be removed and prohibited under that provision if the agency
proves (1) misconduct, (2) a significant effect on the bank, and (3)
culpability in the form of either dishonesty or willful or continuing
disregard for the bank's safety and soundness. It is not a simple
matter to prove these elements, but once proven, they demonstrate that
an individual is unfit to hold a position in or participate in the
conduct of the affairs of an insured institution. See Landry,
id. In Respondent's case, the Board concluded, after an
exhaustive review of the record, that overwhelming evidence supported a
finding that all of these elements were present. Order at 28.
Accordingly, the public interest required Respondent's removal and
prohibition.
After a thorough review, we find that Respondent has presented no
factual or legal basis upon which a stay should be granted.
Accordingly, it is hereby ORDERED and DECREED that Respondent's
request for a stay pending judicial review is DENIED.
Pursuant to delegated authority, upon the advice and recommendation of
the Assistant General Counsel (Trial Litigation), in the absence of the
Deputy General Counsel for Litigation.
Dated at Washington, D.C. this 18th day of April, 2003.