September 12, 2014
By Bob Coleman
Editor, Coleman Report
“Don Langford, former TierOne senior executive and chief credit officer, conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public,” says SIGTARP. “Langford and others engaged in fraud in order to keep regulators at bay and from closing the bank, to maintain and increase the bank’s stock price, and to enrich themselves. The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008. SIGTARP and our law enforcement officers will bring to justice perpetrators of fraud related to TARP and hold them accountable for their crimes.”
Don A. Langford, a former senior vice president and chief credit officer of TARP applicant TierOne Bank, headquartered in Lincoln, Neb., pleaded guilty on Sept. 9, 2014, for his role in a scheme to defraud
TierOne’s shareholders and regulators.
He pleaded guilty to conspiring to commit securities fraud, wire fraud, and making false entries in a bank’s books and records, as well as one count of making false statements.
According to his plea agreement, in 2009 and 2010, Langford and others falsely inflated the value of TierOne’s loan and real estate portfolio in its required reports to the SEC and the Office of Thrift Supervision.
In January 2009, TierOne had executed a supervisory agreement with OTS that required TierOne to report information about its performance and financial condition and to maintain a minimum capital position in relation to its loan portfolio and other assets. Langford and others intentionally used outdated appraisals on properties and rejected new appraisals that would have adversely impacted
TierOne’s reportable assets, revenue, and earnings. In addition, Langford and others delayed seeking new appraisals to conceal the current value of collateral and restructured loan terms to disguise borrowers’ inability to make timely interest and principal payments. As a result, Langford and others were able to hide millions of dollars in losses from regulators and investors.
In 2008, TierOne submitted an application to the OTS seeking Troubled Asset Relief Program (TARP) funding. Ultimately, TierOne withdrew its application and did not receive TARP funds. TierOne filed for bankruptcy shortly after the bank was shut down by OTS in June 2010.
Langford will be sentenced in December.