SAN DIEGO—Federal agents are conducting a probe into possible money laundering at online lender Bank of Internet.
The Justice Department, which is leading the investigation, has interviewed at least one former employee of the San Diego-based bank, according to the New York Post.
Bank of Internet Chief Executive Gregory Garrabrants, head of the bank since 2007, is also a focus of the probe, the Post reported, adding that neither the bank nor Garrabrants has been accused of any criminal activity.
Part of the probe is centered on regulatory filings made by Bank of Internet, also known as BofI, to the Office of the Comptroller of the Currency, according to four people familiar with the matter, the Post stated.
In late 2015, a Houston pension fund filed a civil suit against BofI and its CEO claiming the bank “misrepresented the risks of investing” with it, the Post reported.
BofI allegedly filed incorrect call reports to hide loans made to foreign nationals without requiring them to provide a tax identification number — a form of ID that’s used to root out money laundering, the suit alleges.
BofI is primarily an online bank. Its deposits more than tripled to $6.6 billion since 2013, according to company filings, the Post stated.
“BofI’s accounting and money-laundering controls have been the subject of lawsuits for at least two years — since a former auditor, Charles Erhart, accused Garrabrants in a separate civil suit of flouting disclosure rules,” the Post stated.