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Whitestone Check Cashing Corp., a licensed casher of checks, has entered into a Settlement Agreement with the Superintendent of Banks which includes the payment of a $200,000 fine.


State of New York Banking Department
New York, New York


In the Matter of  
WHITESTONE CHECK CASHING CORP.

A Casher of Checks Licensed Pursuant to Article IX-A of the New York Banking Law

( Respondent )


SETTLEMENT AGREEMENT

WHEREAS, WHITESTONE Check Cashing Corp. (“Whitestone” or the “Licensee”), with corporate headquarters at 30-31 Stratton Street, Flushing, New York 11354, was granted a license on June 27, 1996 to engage in business as a licensed casher of checks pursuant to Article IX-A of the New York Banking Law (the “Banking Law”) by the Superintendent of Banks (the “Superintendent”) of the New York State Banking Department (the “Banking Department”); and 

WHEREAS,during the course of an examination of Whitestone, commencing October 20, 2003, significant numerous violations of the Banking Law and related regulations and of the Currency and Foreign Transactions Reporting Act (31 United States Code Section 5311 et seq.) and the accompanying regulations issued by the United States Department of the Treasury (31 Code of Federal Regulations Part 103.11 et seq.)(collectively referred to as the Bank Secrecy Act (the “BSA”)), including: Violations of the BSA, pursuant to 31 C.F.R. Part 103.22, for the failure of Whitestone to file in a timely and complete manner numerous Currency Transaction Reports (“CTRs”); violations of the BSA, pursuant to 31 C.F.R. Part 103.125, relating to the rules and regulations requiring an effective anti-money laundering compliance program; numerous violations of Banking Law Section 373.1(b), relating to the cashing of checks in excess of allowed amounts; numerous violations of various subsections of the Official Compilation of Codes, Rules, and Regulations of the State of New York, title 3, Part 400.3 (“Part 400.3”), relating to books, records and microfilm requirements; violations of Part 400.6(a)(4), relating to the continuous maintenance for each licensed premises net liquid assets of at least $10,000.00; numerous violations of Part 400.6(b)(3), relating to the cashing of checks which were returned unpaid on more than two occasions; numerous and repeated violations of Part 400.8, relating to reports of changes in employees required to be filed by Whitestone with the Banking Department; violation of Part 300, Part 400.7 and of Part 400.14, relating to an employee knowingly cashing counterfeit checks and the subsequent arrest of said employee; and numerous violations of Banking Law Section 672, Part 400.3, the New York Penal Law Section 175.05 and Section 175.10, and of 31 United States Code Section 5324, relating to numerous false entries and alterations of entries within the large item logs of the Kissena Boulevard and Queens Boulevard licensed locations, required to be maintained pursuant to Part 400.3, and relating to the apparent structuring of a transaction to avoid the filing of a CTR; have been found; and

WHEREAS, as a result of the inability of Whitestone to operate in compliance with Article IX-A of the Banking Law and related regulations and with the BSA, as evidenced by the violations to be cited to Whitestone at the conclusion of the October 20, 2003 Examination cited above, Whitestone is operating in an unauthorized and unsafe manner: and

WHEREAS, the firm Ohrenstein & Brown, LLP (the “Ohrenstein Firm”), outside counsel to Whitestone, will be engaged by Whitestone to monitor certain compliance matters of Whitestone; and

WHEREAS, the parties hereto wish to resolve this matter on the terms set forth hereinafter.

NOW, THEREFORE IT IS STIPULATED AND AGREED BY THE PARTIES HERETO AS FOLLOWS: 

THAT, the Suspension Order, dated December 1, 2003, served by the Banking Department on Whitestone, immediately shall be lifted.

THAT, Respondent agrees as follows:

  1. Without admitting or denying the aforementioned allegations, Whitestone freely and voluntarily waives its right to a hearing on the violations cited above and Whitestone fully understands the terms and conditions of this Settlement Agreement.

  2. Whitestone agrees to pay to the State of New York a fine in the aggregate amount of $200,000 in the following manner: $100,000 within one week of the date of the lifting of the Suspension Order, dated December 1, 2003, issued by the Banking Department against Whitestone; $50,000 within ninety (90) days of the date of the first payment made under the terms of this Settlement Agreement; and $50,000 within one hundred eighty (180) days of the date of the first payment made under the terms of this Settlement Agreement. Each payment is to be made by electronic transfer, in immediately available funds, pursuant to transfer instructions received from the Banking Department. Failure to make timely payment, in whole or in part, shall result in immediate revocation of Whitestone’s licenses.

  3. (a) No later than January 19, 2004, Whitestone shall complete the reconstruction of the “large item log” for 2003 for each of its locations.
    (b) No later than ninety (90) days after the reconstruction of the “large item log” for 2003 for each Whitestone location, Whitestone shall complete the reconstruction of the “large item log” for 2002 for each of its locations.

  4. Whitestone shall maintain the minimum liquidity requirements of Banking Law Section 367.4 and Part 400.6 (a)(4) for each location operated by it.

  5. No later than forty-five (45) days from the date of execution of this Settlement Agreement, Whitestone shall address to the full satisfaction of the Banking  Department all items mentioned in the letter, dated November 26, 2003, from the Banking Department to Whitestone (the “November 26, 2003 Letter”), relating to the examination of Whitestone, commencing October 20, 2003.  Filing of  Currency Transaction Reports shall be properly and timely submitted commencing the date of execution of this Settlement Agreement. 
  6. Whitestone shall be on probation for a period of one year and subject to quarterly examination by the Banking Department, at the expense of Whitestone. 

  7. Whitestone  commits to submit to the Banking Department no later than forty- five (45) days from the date of execution of this Settlement Agreement a compliance program (the “Compliance Program”), in form and substance satisfactory to the Banking Department.  At a minimum, the Compliance Program shall consist of written policies, procedures and reporting  obligations under the BSA and the Banking Law and related regulations.      Whitestone further commits (a) to the implementation of said Compliance Program (b) and to retain the Ohrenstein Firm and Global Consulting Services, Inc., to assist in the design of said Compliance Program and to review such Compliance Program and the Ohrenstein Firm to monitor the performance of  Whitestone in all material respects under such Compliance Program.  As part of  its retainer agreement with Whitestone, the Ohrenstein Firm agrees to provide the Banking Department with weekly written reports, in form satisfactory to the Banking Department, relating to its monitoring role of Whitestone, with the first such weekly monitoring report due no later than thirty (30) days from the date of  execution of this Settlement Agreement.  It is understood and agreed that the Ohrenstein Firm will not guarantee Whitestone’s compliance under the Compliance Program.  

  8. All communications regarding this Settlement Agreement shall be sent to: 

    Paul J. Fazio
    Deputy Superintendent of Banks
    Licensed Financial Services Division
    New York State Banking Department
    One State Street 
    New York, New York 10004

    Mrs. Shelly Boniel
    President
    Whitestone Check Cashing Corp. 
    30-31 Stratton Street
    Flushing, New York  11354

    Manfred Ohrenstein, Esq.
    Ohrenstein & Brown, LLP
    One Penn Plaza, 46th Floor
    New York, New York  10119
  9. The provisions of this Settlement Agreement shall not bar, estop or otherwise prevent the Superintendent, or any state or federal agency or department, from taking any other action affecting the Licensee, any of its current or former officers, directors, employees, or insiders, or their successors or assigns with respect to the matters not relating to this Settlement Agreement or any criminal aspect of the concerned matters in this Settlement Agreement.   

  10. No extension or waiver of the terms of this Settlement Agreement shall be binding on the Banking Department except if in writing, signed by the Superintendent. 

  11. Each provision of this Settlement Agreement shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Superintendent. 

  12.  The effective date of this Settlement Agreement is the date on which it is executed by the Superintendent or her Deputy.  

  13. The provisions of this Settlement Agreement are not confidential.  

Agreed to and Accepted:

Dated:            ____________________.  By: _______________________________
Daniel A. Muccia
First Deputy Superintendent of Banks
New York State Banking Department 
Dated:            ____________________. By: _______________________________
Mrs. Shelly Boniel
President
Whitestone Check Cashing Corp.
Dated:             ____________________. By: ______________________________
Annmarie D’Amour, Esq.
Ohrenstein & Brown, LLP