RSS Feed
September 4th, 2015 
Awake Goy A senior executive at a U.S. bank is actually going to prison for his actions following the financial crisis.
Ebrahim Shabudin, the ex-chief credit officer for United Commercial Bank, was convicted of fraud for falsifying records to hide major loan losses from auditors and investors after the federal government stepped in to help the failing bank under its Troubled Asset Relief Program (TARP). He was sentenced to eight years.
“This massive criminal scheme defrauded investors, including Treasury who became an investor through TARP,” Christy Romero, the Special Inspector General for TARP, said, according toHousingWire. “He was essentially gambling with taxpayers’ bailout dollars, and it was taxpayers who ultimately lost more than $300 million when the bank failed one year after receiving TARP funds.”
United Commercial Bank, which once managed $11 billion in assets, teetered after its strategy of making risky loans made it a candidate for TARP, which gave $300 million to assist the San Francisco-based institution.
While receiving TARP’s help, Shabudin carried out what prosecutors said was a “delay-and-pray” scheme that could not prevent United Commercial Bank from becoming the first bailout-boosted bank to fail during the financial meltdown. It was the ninth largest since 2007 to collapse. “Its dramatic failure cost the federal fund that insures Americans’ deposits more than $675 million,” The Washington Postreported.
Shabudin was the bank’s third officer to be criminally convicted following Senior Vice President Thomas Yu and Chief Financial Officer Craig S. On pleading guilty to conspiracy charges late last year.
-Noel Brinkerhoff
To Learn More:
Bank Executive Sentenced to 8 Years behind Bars in Bailout’s Biggest Criminal Case (by Drew Harwell, Washington Post)
Exec at Center of First TARP Bank Failure Gets 8 Years in Prison (by Ben Lane, HousingWire)
Banks Say “Thanks for the Bailout,” Now We’ll Park our Profits in Overseas Tax Havens (by Steve Straehley, AllGov)
Top Executives at Bailed-Out Companies Keep Getting the Big Bucks, with a Wink from Treasury Dept. (by Noel Brinkerhoff, AllGov)
Source Article from http://feedproxy.google.com/~r/blacklistednews/hKxa/~3/bjlpyYDLhB0/M.html
Posted in 
Tags: 
