Charlotte, North Carolina-based Truist Bank has agreed to pay the United States more than $9.1 million to resolve claims under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
These claims relate to the administration of some SunTrust Bank trust accounts from December 2011 through December 2015. Branch Banking and Trust Company acquired SunTrust in December 2019, and the combined entity was renamed Truist.
The settlement resolves claims arising from SunTrust’s management of sine trust accounts it administered as part of its relationship with a New Jersey company doing business as The Halpern Group. Halpern served as a “structured settlement facilitator” in matters involving individuals who received settlement awards in personal injury litigation and referred those individuals to SunTrust.
These individuals then established trusts at SunTrust that were intended to help them preserve their recoveries by protecting against unwise disbursements. SunTrust and Halpern collected fees in exchange for their agreement to provide these services.
Around December 2011, SunTrust began administering a group of trust accounts, known as the “Doe Run Accounts,” that were referred to the bank by Halpern and resulted from the settlement of lead poisoning cases near Herculaneum, Missouri. Those accounts involved beneficiaries who claimed various health and cognitive issues from lead poisoning.
The feds contend that rather than helping these beneficiaries avoid unwise disbursements, Halpern requested and SunTrust frequently approved imprudent disbursements that were not in the beneficiaries’ best interests, including disbursements for the benefit of third parties, such as relatives. The United States also contends that SunTrust’s approval of these disbursements violated its fiduciary obligations as the trustee of these accounts.