May 22, 2015
By Bob Coleman
Editor, Fraud Friday
‘Steven Moorhouse lied to TARP recipient Old Second National Bank in order obtain more than $1 million in loans for his business, and for his criminal lie, Moorhouse will spend the next 21 months in federal prison,’ says Christy Romero, Special Inspector General for TARP (SIGTARP).
‘When applying for the bank loan, Moorhouse falsely overstated the amount of money his business was owed from customers through accounts receivable that were the collateral for the loan. Moorhouse claimed that he was trying to save the business, but that does not justify criminally defrauding a TARP bank bailed out by taxpayers to save the bank and the financial system. Old Second was ultimately unable to repay its TARP investment, and taxpayers suffered a $56 million loss on their investment in the bank. SIGTARP and our law enforcement partners will ensure that justice is served for all crime against a TARP bank no matter the size, because these crimes can add up to jeopardize the bank and taxpayers’ TARP investment.’
In January 2009, Old Second National Bank, received $73 million in federal taxpayer funds through TARP.
The bank was unable to repay the TARP investment, and Treasury sold its stake in the bank at auction for a loss of more than $56 million.