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Mug Shot Monday – Community Bank CFO Indicted for False Loan Loss Reserves

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November 10, 2014

By Bob Coleman
Editor, Coleman Report

A week after Northern California United Commercial Bank’s Manager of Credit Risk and Portfolio Management pled guilty, the feds indicted the bank’s former CFO.

As we reported on October 27th, Thomas Yu pled guilty of failing to properly downgrade poor performing loans. This enabled the bank to artificially inflate its earnings for 2008.

The earnings were reported in a press release and a conference call in January 2009. Financials were filed with the SEC in March 2009.

In May 2009, the bank announced the financial statements were unreliable and it intended to restate earnings.

The bank failed in November 2009 causing losses to the FDIC of $1.1 billion. Additionally, $297 million in TARP funds were not repaid.

The bank’s chief credit officer and COO, Ebrahim Shabuding has pled not guilty to the charges filed against him in 2011. His trial is scheduled for early next year.

“The bank’s former chief executive, Thomas Wu, was not charged with criminal wrongdoing, but he was named – along with Yu and Shabudin – in a civil case filed by the Securities and Exchange Commission. Shabudin settled the SEC charges, without admitting or denying the allegations, last year. He agreed to pay a $175,000 fine and be banned from acting as an officer or director of a public company. The SEC case is still pending against Wu and Yu,” reports SFGate.

Read the Indictment

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