COLONIE –  In the months after one of Pioneer Bank’s biggest business customers admitted to a $101 million bank fraud scheme, federal regulators found the bank’s anti-money laundering controls to be “fundamentally and materially deficient,” according to allegations made in a filing made last month in federal court.

The customer, Michael Mann, recently began serving a 12-year sentence in federal prison after pleading guilty last year to an elaborate scheme in which he tricked Pioneer Bank and other lenders over a seven-year period into providing him with tens of millions of dollars in loans and lines of credit using falsified documents – and then rapidly shifted the money among dozens of bank accounts to try to cover his tracks.

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