Don Davis, a former Motown guitarist and vocal Kwame Kilpatrick supporter, founded First Independence Bank in Detroit in 1970. (Donna Terek / The Detroit News)
Detroit— Federal prosecutors Friday levied a $250,000 fine against a Detroit bank that repeatedly surfaced in criminal cases against ex-Detroit Mayor Kwame Kilpatrick and contractor Bobby Ferguson.
In addition to the fine, First Independence Bank officials agreed to comply with the Bank Secrecy Act and anti-money-laundering regulations.
“The agreement indicates that, prior to 2009, First Independence Bank had unsatisfactory BSA and AML compliance programs and practices,” according to the U.S. Attorney’s Office.
While it’s unclear what banking activity prompted the settlement, the bank came up repeatedly during the City Hall corruption trial, FBI investigations and Ferguson’s bid-rigging trial.
The government’s action against the bank was announced the day after Kilpatrick’s father, Bernard Kilpatrick, was sentenced in the City Hall scandal and served as a postscript to one of the most important and high-profile public corruption cases in recent U.S. history. Earlier this month, Kwame Kilpatrick and Ferguson were sentenced on corruption charges to 28 and 21 years, respectively.
The chairman and CEO of First Independence Bank is former Motown guitarist Don Davis, a vocal Kilpatrick supporter. The bank was patronized by a host of corrupt Detroit officials, including former Detroit City Councilman Alonzo Bates.
“We are intent on fulfilling effectively and completely our obligations regarding customer due diligence, (Bank Secrecy Act and anti-money laundering) procedures and reporting requirements with respect to suspicious account activity,” First Independence President Richard Zamojski said in a statement.
The bank, the only financial institution headquartered in Detroit, opened in 1970 and has three branches. It had more than $185 million in assets as of Dec. 31.
Its board of directors includes the Rev. Wendell Anthony, a longtime Kilpatrick supporter who also sits on the city’s general pension fund board.
Under Friday’s announced agreement with the U.S. Attorney’s office, the bank must “ensure that its ... policies and procedures will comply with all applicable laws and regulations,” according to a U.S. Attorney’s Office statement.
“It is vital that banks perform the required level of customer identification and due diligence and possess the ability to monitor transactions so that they can report properly to authorities when there is any suspicious criminal activity,” said Barbara McQuade, U.S. Attorney for the Eastern District of Michigan.
McQuade added the bank has since moved to rectify its reporting practices.
“Since the time the deficiencies were discovered in 2009, First Independence has hired a significant number of new officers and staff, including in its BSA department, purchased sophisticated monitoring software, implemented several enhanced projects to identify possible money laundering in customer accounts, filed suspicious activity reports and devoted considerable resources to improve its BSA and AML compliance policies and procedures and controls,” she said.