California Sen. Dianne Feinstein on Friday sued her former campaign treasurer Kinde Durkee -- a popular accountant among California Democrats -- for allegedly defrauding her campaign of as much as $5.2 million. She also sued her bank, First California, for failing to stop Durkee when warning signs of a massive check-kiting scheme arose. The bank, Feinstein's suit alleges, was "at the heart of the illegal transfer out of plaintiffs' accounts" and her action against it details for the first time the suspicious activity Durkee reportedly engaged in as she allegedly moved clients' funds from account to account, covering payouts she made to herself for mortgage payments, clothes, food, credit card bills, and business expenses.
"Despite knowledge of this pervasive pattern of misconduct, First California Bank continued to provide banking services to Durkee and Durkee Associates, LLC for many years, happy to collect the fees and interest generated by the scores of accounts Durkee maintained at the Bank," Feinstein's legal complaint claims. Feinstein's argument against Durkee and the bank rests on claims already made by the FBI, that Durkee transfered millions of dollars between the 400 accounts over which she had signing authority. All those transfers should have raised suspicions at the bank long ago, the suit asserts, but "because the accounts Durkee and D&A [the accounting firm Durkee and Associates] handled held millions of dollars and generated thousands of dollars in transaction and overdraft fees for the Bank," managers turned a blind eye.