The FDIC fined Thomas Lohmann, the founder and former chairman of the Minnesota-based Pinehurst Bank, as well as four ex-directors of the bank, $7,500 each on Friday.
Though the orders did not specify a reason for the fines, Lohmann said that the penalties were a result of the bank’s tardiness in filing a 2009 financial report that “had nothing to do with any other wrongdoing,” according to Star Tribune.
“We had taken the advice of the bank’s president regarding the reporting and only found out about the issue during the criminal prosecution of the then president of the bank,” Lohmann said, Star Tribune reports.
The four ex-directors fined by the FDIC include John G. Lohmann, Jr., Robert A. Kruchoski, Robert J. Anderson and Russell C. Nelson.
Lohmann Jr., Lohmann’s older brother, said that the FDIC fines were excessive.
“I don’t understand why any person would sit on the board of a bank, particularly a small bank, if the board members are treated this way when problems with the bank develop,” Lohmann, Jr. said, according to Star Tribune.
State regulators shut down Pinehurst’s only branch in St. Paul in 2010 before the FDIC sold it to the Wisconsin-based Coulee Bank. Coulee Bank renamed the bank and relocated it in St. Paul.
In September, former Pinehurst Bank President John Markert was sentenced to more than three years in prison after being charged with misappropriating bank funds to cover a $1.85 million check-kiting scheme for customer George Wintz, Jr. The scheme involved convincing borrowers to take $1.9 million in loans from the bank to cover Wintz’s bad checks. Wintz was also sentenced to more than three years in prison, Star Tribune reports.