A minority shareholder in the First National Bank of Pasco has alleged that the Florida-based financial institution has not reformed its board nor established compliance measures essential for continuing to serve cannabis operators. These accusations are outlined in a 31-page lawsuit filed on October 31 in the Middle U.S. District of Florida.
According to the lawsuit, First National Bank of Pasco began processing electronic payments for cannabis operators around 2022 but neglected to conduct necessary compliance due diligence. This oversight reportedly resulted in enforcement actions from the Office of the Comptroller of the Currency (OCC) within the U.S. Treasury, adversely affecting the bank, as stated by Def Trading, a shareholder.
Lawsuit Details and OCC Settlement
The bank reached a settlement with the OCC on September 18, 2025, after the agency determined that the bank was not performing adequate due diligence on its cannabis clients. This included failing to file suspicious activity reports (SARs) and lacking operating procedures to comply with the Bank Secrecy Act and Anti-Money Laundering regulations.
An OCC spokesperson indicated that the agency does not disclose specifics about individual institutions and declined to comment on the case involving First National Bank of Pasco.
Concerns Over Leadership Experience
Def Trading criticized the bank for lacking leadership with the requisite knowledge and experience to navigate the complex regulations governing cannabis-related banking services. The complaint emphasized that the board comprised a group without sufficient banking experience.
“The Board of Directors includes five octogenarians, a 77-year-old, and a 68-year-old, with backgrounds as a personal injury lawyer, a trust and estates lawyer, and in sectors such as insurance and agriculture,” the complaint noted. “Not a single director has prior banking experience.”
The OCC settlement mandated that the bank appoint a compliance committee within 60 days and submit a strategic and capital plan addressing new compliance and risk standards within 90 days.
When contacted, attorneys for both First National Bank of Pasco and Def Trading declined to comment on the matters at hand.
Additional Legal Challenges
The lawsuit from Def Trading is not the only legal issue confronting First National Bank of Pasco. Hashery LLC, a New Jersey-based cannabis retailer operating as Wellness for Sale, filed a suit against POSaBIT and U.S. Alliance Group on May 27, 2025. The lawsuit involves $237,820 being held in a frozen account at First National Bank of Pasco.
POSaBIT collaborates with U.S. Alliance Group, a major payment processing entity, to process transactions. Hashery claims that the frozen funds are impacting their operations.
U.S. Alliance Group had previously announced plans in January 2022 to acquire First National Bank of Pasco, a deal that ultimately fell through. However, Fadi Cheikha, the CEO of U.S. Alliance Group, subsequently joined the bank’s board and retained shares in the institution.
Despite the failed acquisition, it led to First National Bank of Pasco processing ACH payments from cannabis operators. In response to the disputes involving Hashery, the bank filed a suit against U.S. Alliance Group on July 23, 2025, seeking to clarify its role in the ongoing financial disputes.
