Banking Department Issues Order Against C.L.B. Check Cashing, Inc.
State of New York Banking Department
In the Matter of
C.L.B. CHECK CASHING, INC.
Springfield Gardens , New York
Revised Order Issued
WHEREAS, C.L.B. CHECK CASHING, INC. (“C.L.B.”), located at 222-06 South Conduit Avenue, Springfield Gardens, New York and through other licensed locations (See Exhibit A), is licensed by the State of New York Banking Department (“Banking Department”) to engage in the business of check cashing, pursuant to Article IX-A of the New York Banking Law (“Banking Law”); and
WHEREAS, on July 25, 2006, C.L.B., certain senior officers (President Louis Renzo, Senior Vice President William DeRespino and Former Compliance Officer James Gass) of C.L.B., and related affiliated companies (C.L.B. Management Corp; C.L.B. #6, Inc., C.L.B. #3 Corp., and GAS CHECK CORP. II) were indicted for various felony crimes including bribery, money laundering, and rewarding official misconduct (See Exhibit B); and
WHEREAS, on April 26, 2007, C.L.B., Louis Renzo, William DeRespino, James Gass, and related affiliated companies, as stated in the preceding paragraph, each entered into a Plea and Sentence Agreement (the “Plea Agreements”) with the New York County District Attorney’s Office, attached hereto and expressly incorporated by reference herein (See Exhibit C); and
WHEREAS, the New York Superintendent of Banks (the “Superintendent”) is responsible for ensuring the safe and sound conduct of the institutions and entities that the Banking Department licenses and regulates, to make certain that such institutions and entities operate in an authorized manner, and to take such actions as may be necessary in order to protect the public interest, as set forth in Section 10 of the Banking Law; and
WHEREAS, in order to provide for the operations of C.L.B. in a safe and sound manner during the interim period from the date of the Plea Agreements until the sale or change of control of the C.L.B. licensed locations, the Superintendent believes that continued regulatory action is necessary through the issuance of this Revised Order Issued Pursuant to New York Banking Law Section 39 (the “Revised Order”) to protect the public interest and to address the Department’s ongoing supervisory concerns regarding C.L.B. and that additional enforcement action may be necessary to address other supervisory concerns that may come to the attention of the Superintendent;
NOW, THEREFORE, it is hereby ordered that:
- The Order Issued Pursuant to New York Banking Law Section 39 by the Banking Department and served on C.L.B. on August 15, 2006 (the “2006 Order”, a copy of which is attached as Exhibit D), is hereby terminated, effective upon the date of this Revised Order, and superseded by this Revised Order.
- The independent third parties, previously engaged by C.L.B. pursuant to Paragraph 1 of the 2006 Order will remain in place to monitor the daily activities of the corporation, inclusive of all its check cashing locations noted on Exhibit A of this Revised Order, and to continue to report to the accuracy of books and records and to continued compliance by C.L.B. with all relevant state and federal laws and regulations on a monthly basis. If deemed necessary by the Banking Department, a full time on-site examiner may be assigned by the Banking Department as its own monitor in addition to any monitor(s) previously designated by C.L.B.
- C.L.B. will continue to maintain accurate books and records and make such books and records readily available for examination by the Banking Department inclusive of maintaining adequate back-up records to the extent such records are supported by an automated system.
- C.L.B. will continue to provide on a monthly basis to the Banking Department corporate financial statements (balance sheets and income statements) and a detailed ageing of receivables and payables.
- C.L.B. will continue to provide on a monthly basis to the Banking Department a reporting of all related party transactions, including, but not limited to, transactions with affiliated companies.
- C.L.B. will continue to provide on a monthly basis to the Banking Department details of its money transmission activity (transmission, bill payments and money orders) inclusive of evidence of payment of transmission obligations.
- C.L.B. will continue to provide on a quarterly basis to the Banking Department a listing of checks cashed with a face value of $1,500 or more for all check cashing locations.
- C.L.B. will resolve all outstanding issues relating to the audit of its anti-money laundering program, which was performed previously by an independent third-party acceptable to the Banking Department.
- C.L.B. will continue to conduct quarterly reviews of its Bank Secrecy Act and Anti-money laundering programs, to be performed by the designated independent third-party previously retained by C.L.B. A copy of each quarterly review will continue to be submitted to the Banking Department within 15 days of completion of each quarterly review.
- C.L.B. will continue to provide all other reports and information requested by the Superintendent, as deemed necessary, including, but not limited to, the filing of all reports required by the Superintendent’s Regulations Part 400.4. C.L.B. will continue to preserve its books, records, and relating information, including, but not limited to, microfilm records, in accordance with Superintendent’s Regulations Part 400.3 and will be kept readily available for daily inspections by the Banking Department.
- C.L.B. will continue to take all necessary steps to assure that it is in compliance, at all times with all applicable state and federal laws and regulations.
- Upon full compliance with the provisions of the Plea Agreements and upon full compliance with the terms of this Revised Order, the Superintendent shall not take any further action with respect to the matters relating to the Plea Agreements, this Revised Order and the Report of Examination, as of March 9, 2005 against C.L.B., any of its current or former officers, directors, employees or insiders, or their successors or assigns, based upon any information currently known by the Superintendent.
- C.L.B. and its current shareholder, officers, directors, employees or insiders shall be allowed a period of transition, consistent with the terms of each of the Plea Agreements, but in any event not to exceed the date of sentencing under the terms of each of the Plea Agreements, to participate in the day-to-day management of C.L.B. in order to effectuate the sale of each C.L.B. location to a new owner.
- Absent an extension of time granted by the New York County District Attorney’s Office in its sole and exclusive discretion, C.L.B. agrees to surrender any and all of its licenses as a licensed casher of checks to the Banking Department prior to sentencing which will be not later than September 28, 2007, in accordance with the Plea Agreements. In turn, the Banking Department agrees to expeditiously review, in accordance with current Banking Department policy and practices associated with the due diligence process relating to the processing of applications by the Licensed Financial Services Division of the Banking Department as required by Superintendent’s Regulations Part 400.1, any application(s) submitted to the Banking Department for a change of control with respect to the C.L.B. licensed locations.
Due to the critical nature of the circumstances surrounding the indictment of C.L.B., its senior officers, and affiliated companies and surrounding the execution of the Plea Agreements, and for the benefit and protection of the public interest, this Revised Order shall become effective upon the date of its execution.
Witness, my hand and official seal of the Banking Department at the City of New York, this 26th day of April in the Year two thousand seven.
Richard H. Neiman
Superintendent of Banks