Opinion ID: 782377
Heading Depth: 3
Heading Rank: 1

Heading: Control of FPTC

Text: 38 Reviewing the record as a whole, Reddick v. Chater, 157 F.3d 715, 720 (9th Cir.1998), we conclude that the finding of control underlying the Board's conclusion that FIB's four loans to FPTC (totaling over $3 million in one year) violated Regulation O and Section 23A is supported by substantial evidence. See Mayes v. Massanari, 276 F.3d 453, 458-59 (9th Cir.2001); Hoffman v. FDIC, 912 F.2d 1172, 1173-74 (9th Cir.1990). Substantial evidence is more than a mere scintilla but less than a preponderance; it is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Mayes, 276 F.3d at 459 (internal quotation marks omitted). Because De La Fuente owned, controlled, or had the power to vote 25% or more of FPTC's shares, FPTC was an affiliate or related interest of De La Fuente's under Regulation O, 12 C.F.R. § 215.2(c)(1)(i), and Section 23A, 12 U.S.C. § 371c(b)(3)(A)(i). 39 De La Fuente owned 5.6% of FPTC, which he transferred to trusts for his children in 1995. Among FPTC's other shareholders are Andreu (24.42%) and Zapata (5.02%), both close associates and frequent business partners of De La Fuente's. Andreu is also the president of FPTC, and has been a director and board chairman. The company has no employees. Andreu purchased his share in FPTC with funds drawn on the account of Witec Patents (a company of which De La Fuente was a part owner, and of which Andreu eventually became president) supported by the votes of De La Fuente and Zapata. 40 Furthermore, one business day after FIB's directors were faced with $500 per day fines as a result of noncompliance with an FDIC cease-and-desist order, FPTC purchased two loans from FIB, saving it from the payment of the penalties. In addition, FPTC diverted $600,000 of a loan it received to De La Fuente (on undisclosed terms), who used the funds to pay down an unrelated loan, not connected with FPTC. Finally, both the ALJ and the Board found that Andreu represented to [a third party] that FPTC was one of the `De La Fuente' companies. 41 De La Fuente attempts to provide innocent explanations for this evidence, arguing that it could be consistent with a scenario in which he did not control FPTC. However, when the evidence is susceptible to more than one rational interpretation, we will not substitute our judgment for that of the agency. Edlund v. Massanari, 253 F.3d 1152, 1156 (9th Cir.2001). It is a reasonable inference from the evidence as a whole and the very structure of FPTC that De La Fuente controlled FPTC. As the trier of fact, the ALJ was in a superior position to evaluate any conflicting testimony and assess De La Fuente's arguments that FPTC's actions were not controlled by his interests.