Signature board director was forced out of position at NY college over unpaid bills
A member of Signature Bank's board of directors was forced out of her job as president of a New York college late last year, it has been revealed - over a scandal involving millions of dollars in unpaid bills.
When addressing the missed payments back in 2019, Judith Huntington blamed the unpaid bills on the school's controller and its vice president for finance and administration - who have both since been fired - saying they failed to provide her with accurate information on the college's finances.
Over the course of several years spanning 2013 to 2017, the College of New Rochelle failed to pay necessary federal and state payroll taxes, flouting and outright ignoring rules regarding use of federal grant money. Amassing a debt of at least $31.2 million, the school closed in 2019 after 115 years due to the three years of irregularities.
Huntington - a former Manhattan accountant who had worked at the Westchester County school for 15 years - said she had no part in the millions of unpaid funds, despite her resignation.
DailyMail.com can now reveal that Huntington, at the time, worked at the New York-based bank, which was shut down and taken over by New York regulators last Friday. At some point since, the financier was tapped to serve on the bank's board of directors.
Addressing the scandal for the first time since October, Judith Huntington blamed the unpaid bills on the school's controller and its vice president for finance and administration
She did not, however, address her current role as a board director at the New York-based bank, which was shut down and taken over by regulators Friday, days after the collapse of California bank SVB
According to the bank's website, Huntington has been an independent director of Signature since April 2013.
Prior to the bank's forced takeover by the New York Department of Financial Services last Friday, the New York accountant served on the bank's examining, risk, and compensation committees.
Signature goes on to tout some of Huntington's accomplishments in the financial sector - such as her being named to the Women Inc.'s 2019 Most Influential Corporate Directors List shortly before the New Rochelle scandal surfaced, and her subsequent induction into the Business Council of Westchester's Hall of Fame.
Huntington was also a 2008 recipient of the Apex Advocacy Award from the Westchester County Association, and worked for 15 years with high-profile accounting firm KPMG LLP as audit senior manager in Manhattan, before joining the small-liberal arts college as vice president for financial affairs in 2004.
It was this oeuvre of experience, brass at the bank wrote, that led to her being brought on to its hallowed board.
'Ms. Huntington's experience in the financial services sector led the Board to conclude that she should be a member of our Board,' her profile reads.
Back when the scandal was transpiring, Huntington had said it was supposed miscommunications between her and since fired New Rochelle financial executives Keith Borge (left) and Betty Roberts (right) that led to the millions in missed payments - citing how the scandal was bigger than just her due to practices the school had in place
Over the course of several years spanning 2013 to 2017, the school would fail to pay necessary federal and state payroll taxes, flouting and outright ignoring rules regarding use of federal grant money. Amassing a debt of at least $31.2 million, the school closed in 2019
However, last Friday - just two days after Silicon Valley Bank became the largest bank failure since the 2008 financial crisis - federal regulators announced they were taking control of Signature, citing a 'crisis of confidence' in execs' leadership.
That assessment came on the heels of a brief assessment of the bank's practices and activities, which found that like SVB, Signature Bank ran into problems after finding themselves short the necessary cash to cover a recent spate of frantic withdrawals.
Huntington's connection with the bank has yet to be reported, despite her dubious history when it comes to mismanaging other people's money.
Back when the scandal was transpiring, Huntington had said it was supposed miscommunications between her and since fired New Rochelle financial executives Keith Borge and Betty Roberts that led to the millions in missed payments - citing how the scandal was bigger than just her due to practices the school had in place.
'Despite this multi-layered process, unmet obligations and unpaid payroll withholding taxes emerged only upon the controller's retirement,' Huntington told The Journal News/lohud.com of how the scandal emerged after Borge's retirement in May 2019.
According to the bank's website, Huntington - seen here speaking at the college in 2019 - has been an independent director of the Bank since 2013. Prior to the bank's forced takeover Friday, the accountant served on the bank's examining, risk, and compensation committees. It was experience, brass at the embattled bank said, that led to her being brought on to its board
'At which point,' the self-professed finance expert continued, 'I promptly notified the Board so that necessary actions could be taken.'
Borge, the former controller of whom Huntingon spoke, would go on to take the fall for the school's mismanaged funds, after federal prosecutors determined that he alone engaged in extensive unlawful misconduct, despite both Roberts' and Huntington's important roles in the aforementioned process.
A high-profile trial in Manhattan's Southern District Court would a then 62 year-old Borge sentenced to three years in prison. Originally facing up to 25 years in prison and fines of up to $300,000 for the charges, a plea deal allowed the staffer a more slight sentence.
Now 66, has since been released, only after spending several months in custody at a halfway house in Brooklyn, his attorney Lee Auerbach said.
That said, the terms of Borges' deal saw him plead guilty to charges of securities fraud and failing to pay payroll taxes, though at the time, he claimed he was just trying to keep the college open and did not financially benefit from his crimes.
New York based Signature was shut down and taken over by the New York Department of Financial Services last Friday - days after the collapse of California's SVB - with the federal regulator since revealing the takeover was due to a 'crisis of confidence' in execs' leadership
A lawsuit filed by creditors of the now defunct college in 2021, however, has claimed that both Huntington and Roberts were aware of the staffers' actions, and still 'systematically' mismanaged the school's finances while failing to carry out their own duties.
'CNR routinely failed to pay federal and state payroll taxes, flouted and ignored rules regarding use of federal grant money, overdrew its bank accounts, and depleted the majority of CNR's endowment fund,' the suit, which demands $11.2 million be returned to the lenders, states.
It further alleges that for years, the pair helped Borge lie, tamper with documents and illegally shift money around to conceal the depth of the school's financial dire financial straits, as it overdrew its bank accounts and depleted the majority of CNR's endowment fund.
At the time, prosecutors said Borge failed to pay out more than $20 million mandated for payroll taxes and securities fraud dating back to 2014, which, when coupled with the outstanding creditor sum, adds to well over $30million.
The college's board of trustees announced Huntington's resignation in October of 2019, as well as the nixings of Roberts and Borge. While Huntington and Roberts were not formally charged, several creditors still claim they knowingly ignored numerous 'red flags' during Borge's tenure as vice president of finance - a role that Huntington would fill in after he was demoted to controller in 2016.
The creditors, mostly former employees, said that Huntington had failed to adequately supervise Borge while he engaged in the 'extensive unlawful misconduct.
The report further said that Roberts also failed to tell the trustees about Borge's conduct, even as 'she continued to give him responsibility over CNR's key financial matters, notwithstanding her belief that he was incompetent.'
It is also claimed that Huntington and Roberts knew that Borge failed to pay federal payroll taxes numerous times from 2013 to 2016, but 'allowed the situation to fester for years.'
It adds that even after Huntington hired two consultants to go over with the finances following Borge's demotion, trustees made no 'genuine inquiry or investigation' into the state of the school's finances.
President Biden has since besieged regulators to look into what led to Signature's collapse, as is currently being done with SVB
The suit also cites other supposed signs indicating the school's financial status that were missed, such as the college's previous payroll processor ADP's refusal to handle the payroll taxes.
What's more, the suit states that Boston-based Sovereign Bank also cut off the school's line of credit shortly before the scandal came to light, and Santander Bank reduced the line of credit.
Creditors further alleges that when an employee complained directly to Huntington, she shut down the inquiry, telling the staffer that Borge had told her the taxes were paid.
The creditors committee accuses all three of the former staffers of breach of fiduciary duty and violations of the state not-for-profit corporation law.
The complaint demands damages but does not specify how much is sought. It has yet to be resolved.
The news come comes after both SVB and Signature failed within days of each other last week, spurring billions of dollars in losses as well as investigations into the collapses, to be carried out by the Justice Department and SEC.
Both of the federal agencies announced this week that will probe the collapse of Silicon Valley Bank, which had been a major bank in the US tech industry.
Two days' after SVB's collapse, as customers flocked to branches to regain deposits beyond what the bank could pay in its cash reserves, New York-based Signature, which stood out as one of the main banks accepting cryptocurrency, would also fall.
The consecutive failures have since shaken the financial landscape as well as Americans' faith in the U.S. banking system, which has already began to have a ripple effect.
One of the first casualties to surface in the banking sphere is the renowned Swiss firm Credit Suisse, whose shares hit a record low on Tuesday.
As for Signature Bank, the bank was shut down and taken over by the New York Department of Financial Services last Friday, with the federal regulator since revealing the takeover was due to a 'crisis of confidence' in execs' leadership.
A spokesperson for the federal on agency on Tuesday added that that takeover was not 'crypto related,' referencing the big banks ties to the currently volatile currency market.
NYDFS' statement further revealed that the bank still had 'significant withdrawal requests' pending over the weekend, as clients rushed to regain their deposits on Friday.
The bank has since acknowledged that that day, depositors withdrew over $10 billion. President Biden has since besieged regulators to look into what led to Signature's collapse, as is currently being done with SVB.
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