Whistleblower alleges Irvine-based Banc of California CFO diverted funds, paid for strippers – Orange County Register

Banc of California, the Irvine-based lender under investigation by U.S. regulators after a short seller linked it to an imprisoned con man, inflated profits and ignored a top executive using company funds to pay for strippers, according to a whistle-blower lawsuit.

A management decision to reverse accrued employee bonuses caused the company to improperly carryover revenues generated in 2016 to make it look more profitable this year, according to the lawsuit filed Thursday by Heather Endresen, who was most recently a managing director for the bank’s Small Business Administration’s loan program. Endresen said she was wrongfully terminated after complaining about the shifting pool of bonuses as well as the behavior of the company’s then-chief financial officer Francisco Turner.

Turner used company funds to pay for strippers and had sex with employees in his office, according to the complaint. He also used drugs and pressured junior employees to join him, Endresen alleged.

“I will not comment on pending legal matters particularly since there are no claims against me personally,” Turner said in a statement provided through a spokeswoman. “I vigorously dispute the allegations made about me and am confident that I will be vindicated once the legal process takes its course.”

Endresen said she was told by the lender’s in-house counsel that the company didn’t have a policy prohibiting employees from engaging in sexual activity in the workplace or using corporate funds to pay for strip clubs.

Turner ultimately resigned in June to pursue financial technology, venture investing and other interests, the company said in a statement at the time. His decision to leave didn’t relate to issues with the company’s financial reporting or the integrity of the bank’s systems or controls, according to the statement.

‘No merit’

“The action has no merit and we intend to defend against the claims vigorously,” Joe Hixson, a spokesman for the company, said in an emailed statement, declining to discuss specific claims or personnel matters. “We treat all matters of compliance with the utmost seriousness and any suggestion otherwise is categorically wrong. We encourage all employees to raise any area of concern and we investigate all claims thoroughly.”

Banc of California landed in the national spotlight after agreeing in 2016 to pay $100 million over 15 years to put its name on Los Angeles’s new soccer stadium. The deal was one of the richest…

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