YOUNGSTOWN, Ohio — Steve Lewis, the former CEO of the former First Place Financial Corp. and First Place Bank, today responded to The Business Journal’s earlier report that he has been fined $50,000 by the Office of the Comptroller of the Currency as part of a consent order.
Lewis, in an email, said he “will not comment on the circumstances that took place at the bank so many years ago. Those circumstances were involved complicated and technical.” And by signing the consent order, he emphasized, he did so to “[end] this outrageous proceeding. There is no admission of any kind on my part, which is documented accordingly.”
In the consent order, the Office of the Comptroller of the Currency states that Lewis, from 2008 to 2012, “failed to ensure that the bank properly identified and accounted for problem assets and troubled debt restructurings, to accurately report its income and capital, and to ensure an adequate allowance for loan and lease losses balance.”
As a result, the OCC said First Place Financial Corp. filed “materially inaccurate [financial reports] for years 2008, 2009, 2010 and 2011, and [incurred] substantial expenses to restate its financials and correct its misstated books and records.”
Moreover, according to the consent order, “As CEO of the bank, [Lewis] participated in restructuring a cash-out refinance mortgage loan to a troubled borrower of the bank, who was a partner in [his] outside business.”
And, in addition to “[using] bank resources for his own personal use,” the findings state, Lewis “failed to timely disclose to the board a $9.8 million judgment against him and a troubled borrower of the bank.”
In his response emailed to The Business Journal, Lewis says the Office of the Comptroller of the Currency “waited over four years to bring this to a head and on matters that extended as far back as a decade ago. So much for due process.
“I repeatedly requested of the OCC to have access to my old files wherein I had volumes of notes and reports. I was denied. So much for due process. It was estimated by my attorney that $350,000 to $450,000 would be required to defend myself in a full administrative proceeding with the OCC. So much for due process. Even if I had the resources to defend myself, the OCC had the final say as to what or who I could subpoena. So much for due process.
“The cold sad truth is that the government has unlimited resources and time at their disposal. They can assign lots of young inexperienced people who read a few reports and draw their own conclusions, no matter the degree of accuracy. They can write down a bunch of half-truths and even no-truths, and do it without consequences. The government can say and do whatever it wishes and remain unchecked because, unless you are very wealthy, you are subject to what equates to regulatory extortion. As a result, I have enormous empathy for anyone who has or will get thrust into a David vs. Goliath scenario such as this. It is literally a no- win situation. I don’t know who created this ‘rigged’ process but this is not my America,” Lewis wrote.
The consent order mandates that Lewis pay the $50,000 fine in full by Feb. 25, 2017. In signing it, he also agreed to a cease and desist order that stipulates notification and compliance procedures should he again be employed by a financial institution governed the federal law.
First Place Financial Corp. filed Chapter 11 bankruptcy in October 2012 and sold its assets to Talmer Bancorp Inc., based in Troy, Mich., for $45 million as part of the restructuring. At the time, the chairman of First Place Financial Corp., Samuel A. Roth, said in a statement, “First Place Bank has faced significant issues for a number of years, and today’s agreement with Talmer will enable us to meet the capital requirements set out by our regulator in July 2011.”
The Office of Thrift Supervision issued First Place a cease and desist order July 14, 2011.
Lewis is the co-owner of Landers-Lewis Insurance & Consulting LLC, based in Boardman.
In his email to The Business Journal, Lewis said he’s “confident that anyone who has had the privilege of serving in the role of CEO will attest that it comes with rewards and consequences. I have experienced both. It became glaringly apparent that someone needed to ‘fall on the sword,’ as it were and that was going to be me. Well, so be it,” he wrote.
“I spent 29 years of my life in that company trying to build a team and a culture that others wanted to emulate. I am not sorry for that. It is, however, personally devastating to me to have this ‘settlement’ tattooed to my resume but I simply had no practical alternative available. I am no longer a public person per se and do not wish to debate these matters in public anymore. I just wish to move on.”
Copyright 2017 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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