4th bank appears to have been drawn into alleged fraud case involving Worley & Obetz
LANCASTER COUNTY — A fourth Pennsylvania bank appears to have been drawn into the Worley & Obetz alleged fraud case, triggering a loss of several million dollars.
S&T Bancorp disclosed Friday that it expects to lose $4.5 to $5.4 million on a pair of loans “to a single, large commercial customer.”
With its disclosure, S&T Bancorp joins Fulton Financial, Franklin Financial Services, and Univest Corporation of Pennsylvania as financial institutions that have reported heavy losses to the SEC.
None of the four institutions named the borrower in the text of their filings, but the header of the Franklin text file sent to the SEC says “2018 Worley Obetz Impairment.”
The total potential hit to Worley & Obetz’s reported lenders could reach as much as $61.9 million.
“The loss resulted from fraudulent activities believed to be perpetrated by one or more executives employed by the borrower and its related entities,” S&T Bancorp said in its disclosure to the SEC.
Worley & Obetz announced Monday that it is closing operations after its lenders did not approve its proposed restructuring plan.
Fulton Financial has said it could lose up to $32 million of its $48 million loan. Univest disclosed it could lose all of the $13 million it loaned to the company, while Franklin said it could lose anywhere from $10 million to $11.5 million of the $14 million it loaned.