New Investigations By Federal Agencies & NYDFS Could Shatter Sterling National Bank’s Merger With Hudson Valley Bank

Sterling National BankLast week, I wrote about how the FDIC and the U.S. Treasury’s Office of the Comptroller of the Currency (OCC) have launched investigations into the treatment of Sterling National Bank customer Bill Youngblood.

On Friday, MFI-Miami confirmed that not only are the FDIC and the OCC investigating Sterling National Bank‘s treatment of Bill Youngblood but now the New York Department of Financial Services (NYDFS) has launched its own investigation into the mob style treatment of Bill Youngblood.

The complaints filed with the FDICOCC and NYDFS allege that an employee of Provident Bank (which has since merged with Sterling National Bank) under the supervision of Assistant Vice President, Dino Saracino improperly withdrew money out of the corporate business accounts of Bill Youngblood and then applied the funds to his residential mortgage without his knowledge or consent. This action by Sterling National Bank caused dozens of checks written by Youngblood to bounce costing Youngblood thousands of dollars in NSF fees. It appears Sterling National Bank did this for the sole purpose of reaping thousands of dollars in NSF fees from Youngblood.

Soon after this unauthorized transfer of funds by Provident, Bill Youngblood began negotiating with Provident Bank to modify the first and second mortgages on his residence while renegotiating a refinance of his loan on his commercial property in Harriman, New York.

The complaints also allege that in July 2013, after nearly 24 months of negotiating a loan modification and continual assurances by Dino Saracino that there was a deal close at hand, Provident, without notifying Youngblood, hired Blustein, Shapiro, Rich & Barone, LLP to foreclose and thus begin the illegal process known as “Dual Tracking” on both properties.

In April, 2014, Saracino now working for Sterling National Bank informed Youngblood that they would modify the commercial loan if he deposited $20,000 into a Sterling National Bank account. When Youngblood asked for term sheets or a copy of the new mortgage and note, Saracino refused and demanded the $20,000 be deposited first.

In February of this year, Youngblood thought he had finally put this ugliness behind him when attorneys from Blustein, Shapiro, Rich & Barone, LLP agreed to settle the foreclosure action if Youngblood gave them $100,000.

After receiving a certified check for $100,000 from Youngblood’s attorney, Sterling National Bank’s attorneys, Blustein, Shapiro, Rich & Barone, LLP informed Youngblood that Sterling National Bank had changed their mind and wanted to continue with litigation and keep the $100,000. Youngblood and Stutman demanded the check be returned.

In November of last year, Sterling National Bank and Hudson Valley Bank agreed to merge pending shareholder approval and had expected the merger to be finalized by June 1, 2015. However, the investigations by federal and state regulators could delay the merger or in a worse case scenario shatter it all together.

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