March 6, 2015
By Bob Coleman
Editor, Fraud Friday
TARP bank recipient United Commercial Bank cost the taxpayers almost $300 million in unpaid TARP investments when it failed.
When Southern California-based East West Bank acquired the assets via the FDIC, it got this juicy loan relationship with Eastern Tools and Equipment — a company based in Ontario, California that sold equipment such as portable generators.
SIGTARP’s Christy Romero says, “Today, federal agents arrested Louis Yeung after he was charged in a $9 million scheme to defraud TARP recipients UCB and East West Bank.
“Eastern Tools president and CEO Fan and vice president Yeung stand charged of conspiring to create more than 20 fake customers to make it appear as if Eastern Tools’ accounts receivable was far larger than it was.
“The alleged conspirators then used those fraudulently overstated accounts receivable to make fraudulent requests to draw down money under a $5 million line of credit with the banks and to have that line of credit extended and renewed to up to $11 million.
“Additionally, Fan and Yeung stand charged of siphoning money from Eastern Tools to pay personal expenses. When Eastern Tools defaulted on its line of credit, it allegedly cost the TARP banks more than $9 million, and when UCB collapsed, it cost taxpayers more than $298 million in lost TARP funds.
“SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud undertaken at the expense of taxpayers’ TARP investments and bring swift justice to perpetrators.”