A former executive from a Long Island bank has filed a federal lawsuit claiming he was wrongfully terminated after investigating potentially dubious financial activities involving a board member. Ross Marrazzo, who was the Chief Compliance Officer at New York Community Bancorp, asserts his dismissal in September was linked to his objections about Alessandro “Sandro” Dinello’s involvement in these matters.
Dinello has been part of the bank’s board for three years and briefly served as CEO in early 2024, during which time he was responsible for selecting new leadership, as documented in securities filings.
Marrazzo’s job termination came amid inquiries into a multi-million dollar transaction involving Dinello and a billionaire. According to the lawsuit, Dinello deposited $5 million into the billionaire’s account and received significant repayments, although no documentation exists to substantiate these transactions.
This series of exchanges raised alarms among compliance officers who suspected that Dinello might be using financial transfers for money laundering or insider trading, as stated in the lawsuit.
Additionally, Marrazzo alleges that during an incident in 2024, while a junior bank employee was sitting on Dinello’s lap, he interfered with investigations into possible money laundering tied to longstanding bank clients. Marrazzo learned of this through an unnamed NYCB executive who attended a Zoom meeting where Dinello discussed confidential transactions—a revelation that prompted Marrazzo to alert the Board of Directors about the inappropriateness of Dinello’s conduct.
An independent law firm, hired by the NYCB to review these complaints, reportedly concluded that any punitive response against Dinello was unwarranted. Marrazzo claims that he was informed by this firm that Dinello “could potentially sue” if let go, complicating matters further.
This situation highlights the troubling attitude of the bank’s leadership, as perceived by Marrazzo, who believes they defend one another despite potential breaches of law.
Dinello joined the NYCB Board in 2022 following the bank’s acquisition of Flagstar Bank in Michigan, which has led to recent turmoil for NYCB, resulting in significant drops in shareholder value linked to financial losses and issues surrounding the Flagstar deal.
A bailout worth $1.1 billion in March 2024, orchestrated by former Treasury Secretary Steven Mnuchin among others, saved NYCB from a federal takeover. Following that, Joseph Otting stepped in as CEO, initiating a turnaround strategy under the Flagstar name.
Dinello and the bank are named as defendants in Marrazzo’s lawsuit, though no responses have been received from them. Marrazzo has since relocated to South Carolina and is pursuing reinstatement and compensation totaling approximately $333,333, in addition to back pay and damages.
Flagstar has emerged as a major player in the banking sector, ranking as the 33rd largest bank in the U.S. as of the end of June, and operates around 360 branches across several states.
