A federal grand jury indicted a former American Savings Bank employee on charges of theft, embezzlement and bank fraud, according to documents released yesterday.

Marilyn De Motta, who was a supervisor at the Hawai'i Kai branch, used her position to take hundreds of thousands of dollars from Ada Lim, a 92-year-old customer, and her family, the Nov. 15 indictment charged.

The 10-count indictment also alleged that De Motta stole money from the federal government by diverting more than $91,000 in cashier's checks that Lim had intended to pay taxes with.

The indictment comes more than a year after Lim and American Savings' former security director Bert Corniel filed separate civil lawsuits alleging that De Motta stole money from Lim and that bank officials tried to cover up the matter.

Federal prosecutors, the FBI and officials with the U.S. Treasury Department are continuing to look into the matter.

Federal investigators seized computers at American Savings' Downtown headquarters last year and issued a blanket subpoena for copies of company e-mails, financial statements and other records.

Federal investigators also have spoken with several current and former American Savings employees.

American Savings declined comment yesterday.

In the past, the bank denied that it tried to conceal fraud and said it was cooperating with the federal investigation.

In an Aug. 16, 2006, written statement, American Savings Chief Executive Officer Constance Lau said the bank terminated De Motta "promptly" after conducting its own investigation and that American Savings "did not in any way, shape or form cover up anything."

De Motta, a former 'Ewa Beach resident now living in Las Vegas, could not be reached, and her attorney, Emmanuel Guerrero, had no comment, saying he had not read the indictment.

De Motta previously said that Lim loaned her the money.

If convicted, De Motta faces up to 30 years in prison and a $1 million fine for each bank fraud and embezzlement charge and up to 10 years in prison and a $250,000 fine for each theft of public funds charge.

De Motta is expected to make an initial appearance in Honolulu federal court next week.

The lawsuit filed by Corniel, the bank's former security director, claimed that American Savings officials told him not to report the alleged fraud to federal regulators as required by law.

The bank settled the Corniel and Lim lawsuits by paying each more than $1 million.

The lawsuits documented portions of the bank's early response to the case. In February 2005 shortly after the bank began looking into the matter, De Motta, two human resources employees and a notary went to Lim's house with a bouquet of flowers, cookies and mochi crunch.

American Savings said the meeting was part of an internal investigation into De Motta, but during the visit, the bank employees asked Lim to re-sign a document that De Motta had produced to show that Lim had loaned the money to De Motta.

Lim signed the document, but in later testimony Lim said she was not aware that the people who had visited her at her home to sign the loan document were employees of American Savings.

Lim also denied that she gave De Motta a loan.

"I was in the dark," Lim said in a Dec. 6, 2006, deposition. "I thought it was more like a party."

In a separate incident, Corniel alleged that a bank executive, Abel Malczon, attempted to downplay the alleged theft of Lim's money.

During his initial investigations of De Motta's conduct, Corniel wrote a 150-word internal report alerting bank executives that De Motta may have taken hundreds of thousands of dollars from a customer.

Several days later, Malczon reduced Corniel's report to 65 words, taking out the part about a bank employee taking money from a customer.

Malczon, who could not be reached for comment, resigned from the bank in August.

Other executives who had a role in handling the Lim matter also have left the company.

Ken Newman, Corniel's former supervisor, and Stan Chong, American Savings' general counsel, recently resigned from the company, said bank spokeswoman Dawn Dunbar.

The resignations occurred after the board of American Savings parent company, Hawaiian Electric Industries, asked an outside law firm, Orrick, Herrington & Sutcliffe LLP, to conduct an independent inquiry.

The bank declined to disclose the law firm's findings. Orrick partners Walter Brown and Preston Burton, who previously represented Monica Lewinsky and former CIA spy Aldrich Ames, could not be reached.

TIMELINE OF EVENTS

February 2004: American Savings Bank Hawai'i Kai operations supervisor Marilyn De Motta befriends elderly bank customer Ada Lim and offers to help Lim with her taxes and other financial matters.

August 2004: De Motta instructs Lim to deposit the proceeds from the sale of a Wahiawa property, or about $688,000, into Lim's checking account at American Savings.

October 2004: De Motta prepares a written statement saying Lim loaned her $304,000 at a 2 percent interest rate.

December 2004: De Motta deposits $212,000 of Lim's money into a savings account at American Savings in her father's name, Bernadino Pidong.

January 2005: American Savings' code of conduct committee begins an investigation of De Motta.

February 2005: American Savings sends De Motta, two human resources employees and a notary to Lim's house bearing a bouquet of flowers, cookies and mochi crunch.