May 9, 2001 – A senior executive fired from his job at Jeffrey Prosser’s V.I. Community Bank has sued his former boss, alleging that he was used as a scapegoat to cover violations of banking laws and attempts by Prosser to give favorable loans to his friends.
John Matheson, former VICB vice president and senior loan officer, and his attorney, Lee Rohn, filed suit in District Court last week against the bank and Prosser. Matheson alleges that he was fired about a year ago because a Federal Deposit Insurance Corp. audit done last July found that loan overdrafts were not being reported to the bank board of directors at its monthly meetings.
Matheson contends, however, that he reported all information to Michael Dow, VICB president and CEO, the person responsible for communicating with the board. According to Matheson, it was Dow who decided that several major clients would be carried on short-term overdrafts instead of documented loans.
In the lawsuit, Matheson also alleges, among other things, that the bank:
– Allowed Prosser to withdraw "excessive amounts" of bank assets for his personal use.
– Paid Ann Abramson, a former Public Works commissioner who is serving time in federal prison for fraud, $500,000 through a corporation for "questionable" consulting fees.
– Instituted a policy not to bounce any checks issued by Innovative Communication Corp., Prosser’s largest holding.
Meanwhile, Dow on Tuesday refuted reports that he had been fired. He said the rumor probably surfaced in the wake of Matheson’s lawsuit, which he declined to comment on.
"I’m still here," Dow said. "Nobody has told me I’ve been fired." The rumor is "probably connected to [the lawsuit] in some way, shape or form."
In the lawsuit, Matheson states that over the three years preceding his dismissal, he was given merit pay and bonuses on a regular basis for his work. He contends that he was fired because of his "refusal to continue to remain silent" while banking laws were being violated and Prosser attempted "improperly" to favor friends and unnamed politicians.
Matheson’s lawsuit comes on the heels of the FDIC’s extension of its deadline for VICB to complete the acquisition of Chase Manhattan Bank's branches in the Virgin Islands. The deadline was moved to Sept. 7 from May 7.
Although the FDIC peppered its Nov. 7, 2000, approval of the Chase deal with warnings and conditions, it also praised VICB for its involvement in the community. See "Prosser's bank merger faces many obstacles" for Source coverage of that story.
