Whistle-Blower Points the Fraud Finger at Banc of California

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Banc of California, Inc. is under investigation by U.S. regulators. The investigation follows a situation in which a short seller linked the institution to an imprisoned con man, alleged inflated profits and a top executive who allegedly supported his stripper habit with company funds. Allegations were detailed in a whistle-blower lawsuit filed by Heather Endresen, a former managing director for the Small Business Administration’s Loan Program.

According to the lawsuit, a decision was made at management level that reversed accrued employee bonuses, which caused Banc of California Inc. to carry over revenues generated in 2016 improperly in order to create a “false” representation of profits for the year. After complaining about the shifting of the pool of bonuses, as well as the inappropriate behavior of the then-CFO, Francisco Turner, Endresen claims she was wrongfully terminated.

According to the complaint filed by Endresen, Turner used company money to pay for strippers as well as engaging in sexual conduct with employees at the office, using drugs at work and putting pressure on lower level employees to join him in his behavior.

Turner declined to comment on the allegations other than to say that there are no claims against him personally and he disputes the allegations made about him. He stated that he would be vindicated through the legal process.

Endresen claims that when she reported the problems, she was told by Banc of California’s legal counsel that the company did not have a policy in place that prohibited employees from engaging in either behavior (engaging in sexual activities in the workplace or using company money to pay for strip clubs). Turner resigned from his position as Banc of California CFO in June in order to pursue other interests. According to the official statement on the matter, Turner’s decision to leave did not relate to any issues regarding the company’s financial reporting, system integrity, etc.

The company insists that the action has no merit and that they will be defending against the claims.

If you have questions regarding wrongful termination or you have been wrongfully terminated from your employment, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.