Federal Reserve Board Issues Prohibition Order Against Former Bank Employee for Embezzlement

2026-06-19 · Regulation · QuoteReporter

Federal Reserve Board Issues Prohibition Order Against Former Bank Employee for Embezzlement

The Federal Reserve Board has issued an enforcement action against Matthew Cheong, a former senior relationship banker at Manufacturers and Traders Trust Company, for embezzling approximately $95,000 from the bank. The action, announced on June 18, 2026, includes a prohibition order that prevents Cheong from participating in the affairs of any federally insured financial institution.

Details of the Enforcement Action

The Federal Reserve Board's enforcement action against Matthew Cheong, also known as Heng Kean Cheong, stems from his activities while employed at Manufacturers and Traders Trust Company, a state member bank based in Buffalo, New York. Cheong was terminated from his position on February 12, 2025, following the discovery of his embezzlement activities.

According to the Federal Reserve's order, Cheong engaged in a series of transactions from at least November 2024 through January 2025, during which he embezzled approximately $95,000 from the bank's branch vault. His actions included forging cash counts and vault verifications, which constituted violations of law or regulation, unsafe or unsound banking practices, and breaches of fiduciary duty. The order highlights Cheong's personal dishonesty and willful disregard for the bank's safety and soundness.

Prohibition Order and Its Implications

The prohibition order, issued under Section 8(e) of the Federal Deposit Insurance Act, prohibits Cheong from participating in any manner in the conduct of the affairs of any institution or agency specified in the Act. This includes any insured depository institution, holding company of an insured depository institution, or any subsidiary of such holding company, as well as any foreign bank or company to which the Act applies.

Specifically, Cheong is barred from soliciting, procuring, transferring, or attempting to transfer voting rights in any institution described in the Act. He is also prohibited from serving as an institution-affiliated party, such as an officer, director, or employee, in any such institution.

Consent and Waiver of Rights

Cheong has consented to the issuance of the prohibition order without admitting or denying the allegations made by the Board of Governors. By consenting, he has waived his rights to a hearing, judicial review, and any challenge to the order's basis, issuance, terms, validity, effectiveness, or enforceability. This consent was given to settle the matter without formal proceedings or extended litigation.

Potential Penalties for Violation

Any violation of the prohibition order could subject Cheong to civil or criminal penalties under Sections 8(i) and (j) of the Federal Deposit Insurance Act. The order remains fully effective and enforceable until expressly modified or terminated by the Board of Governors.

Future Actions and Compliance

The order does not prevent the Federal Reserve Board or any other federal or state agency from taking further action against Cheong based on facts not currently known to the Board. However, the Board has agreed not to pursue additional actions against Cheong concerning the matters addressed by this order, provided he complies with its terms.

All communications regarding the order are to be directed to Richard M. Ashton, Deputy General Counsel, and David Williams, Senior Associate General Counsel, at the Board of Governors of the Federal Reserve System.