BILLINGS (AP) — The FBI is investigating the embezzlement of nearly $3.7 million from First Security Bank in Malta, state banking officials said.
The bank acknowledged the theft in a federal filing on June 30,
The Billings Gazette reported Tuesday.
The theft was discovered by a third-party processing company that handles First Security's in-house Visa and MasterCard accounts. Bank president Gary Howell reported the theft to the Phillips County sheriff's office on May 2, and the sheriff turned the case over to the FBI.
Montana banking commissioner Melanie Hall said such a high level of embezzlement is "incredibly rare" in the state.
The Gazette reported that a bank employee is suspected in the long-term embezzlement. The name of the employee hasn't been released. The U.S. Attorney's Office in Billings declined to comment on the case.
The bank has 11 employees, Howell said.
After the bank wrote off the loss, the
Federal Reserve Board in Minneapolis ruled that it was "critically undercapitalized" and gave Howell and the board of directors 30 days to strengthen the bank's assets.
"The shareholders have injected some more capital into the bank, and a claim is ongoing with the bonding insurance company," Howell said.
First Security depositors should not be affected, Hall said, because they are covered by the Federal Deposit Insurance Corp. up to $250,000 for most accounts.
The Federal Reserve order also required First Security to get written approval before accepting new deposit accounts and restricted bonus payments to bank executives.
Howell said this is the first serious problem at the bank since it opened in 1972.
Malta Mayor Shyla Jones said the town of 2,000 on the Hi-Line has three banks.
"If we were to lose any (of the banks), it would be detrimental to our agricultural and our business community," Jones said.