A federal judge Wednesday allowed prosecutors to enter into a one-year deal with a criminally charged former employee of a failed Bridgeport bank that collapsed amid a fraud that led to charges against several individuals, including former Ald. Patrick Daley Thompson.
Federal prosecutors earlier this month filed a conspiracy charge against Brian Fong, who was once the manager of the Archer Street branch of Washington Federal Bank for Savings. They alleged that Fong worked with two colleagues at the bank to cook the books and thwart federal regulators.
On Tuesday, federal prosecutors asked U.S. District Judge Steven Seeger to approve a so-called deferred prosecution agreement with Fong. If Fong holds up his end of the deal, which includes cooperating with the feds in their investigations, then prosecutors are expected to seek dismissal of the criminal charge after one year.
Seeger gave the deal a green light during a hearing Wednesday morning. During that hearing, Assistant U.S. Attorney Brian Netols noted that Fong’s deal will also prevent him from working with financial institutions without written consent from regulators.
Netols also said Fong is expected to testify in an upcoming trial related to the bank collapse.
Washington Federal’s failure led to criminal charges against 15 others. Among them was Thompson, who was convicted at trial in February 2022 of lying to regulators and filing false income tax returns. The conviction cost Thompson his seat on the City Council and landed him a four-month prison sentence.
Also convicted at trial earlier this year was Robert Kowalski, a longtime friend, customer and business partner of the bank’s late president, John Gembara.
Gembara was found dead in the home of a bank customer on Dec. 3, 2017. Authorities have labeled Gembara’s death a suicide. The bank customer who owned the home, Marek Matczuk, has also been charged in connection with the fraud.
The Office of the Comptroller of the Currency shut Washington Federal down on Dec. 15, 2017, less than two weeks after Gembara’s death. The Federal Deposit Insurance Corp. spent $139.8 million to cover losses from what authorities have described as Gembara’s scheme to give millions of dollars to friends and customers without requiring them to repay the money.
So far, the FDIC has recovered about $58 million.
Also mentioned in the charges against Fong are former Washington Federal employee Cathy Torres and former bank board member Janice Weston. Both have previously been charged in connection with the fraud at the bank. Torres has pleaded guilty. Weston has not. She faces trial in September.
Fong’s deal with the feds alleges that Weston told him to alter reports at the bank to make it seem that Washington Federal was checking bank customers against a list from the Office of Foreign Assets Control, as was required by internal policies.
Fong knew that list wasn’t being checked prior to certain transactions, according to the deal.
He also understood that the documents he fraudulently altered would be given to the Office of the Comptroller of the Currency during its examinations of Washington Federal. The conspiracy allegedly lasted from 2011 until 2017.
Contributing: Tim Novak
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