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STOUGHTON COMPANY PAYS $43,000 IN SETTLEMENT OF GOVERNMENT'S BANK FRAUD CHARGES

 BOSTON, Oct. 28 /PRNewswire/ -- United States Attorney A. John Pappalardo today announced that STD Manufacturing, Inc., a Stoughton, Massachusetts manufacturer of medical equipment and machine tools, has agreed to pay $43,000 in settlement of the United States' civil penalty claims arising from the company's fraud upon Baybank and Fleet Bank.
 More particularly, during 1992, STD engaged in unlawful "kiting" between its accounts at BayBank and Fleet Bank. In a series of transactions during that year, STD deposited checks written on its Baybank account into its account at Fleet, and, on or about the same day of each such deposit into the Fleet account, STD deposited checks written on its Fleet account into its account at BayBank. At the time of these transactions, STD had insufficient collected funds available in its depositary accounts to cover the amounts of the transactions. Through the circle of deposit transactions, however, STD masked the lack of collected funds in its accounts and gained the benefit of bank funds credited to its accounts but not yet collected by the respective banks. When the conduct was discovered in November, 1992, the "kite" transactions totalled at least $174,000. In addition to the civil penalty, STD has made restitution to the banks.
 In the absence of a settlement, the United States intended to prosecute its action against STD under the civil penalty provisions of Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Congress enacted Section 951 of FIRREA as an additional means of fighting financial institution fraud. Under the statute, the United States may seek civil penalties as an alternative to, or in addition to, any criminal sanctions for certain enumerated financial institution fraud violations.
 This action is being handled by Assistant United States Attorney David Abelman of Pappalardo's Civil Division.
 -0- 10/28/93
 /CONTACT: Press Officer of the U.S. Attorney's Office, 617-223-9445/


CO: U.S. Attorney's Office; STD Manufacturing, Inc.; BayBank; Fleet
 Bank ST: Massachusetts IN: FIN SU:


DJ -- NE018 -- 8219 10/28/93 18:06 EDT
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Publication:PR Newswire
Date:Oct 28, 1993
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