April 8, 2016
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — Former TierOne Chief Credit Officer and COO Sent to Jail
21 months for James Laphen and 34 months for Don Langford
The two were sentenced after former the founder and CEO Gil Lundstrom got his 11 year sentence last month.
Senior bank officials who keep two sets of books will be held accountable for their crimes, and the court’s sentencing of two bank officials to prison today is proof of that,” says Special Inspector General for TARP Christy Goldsmith Romero in a press statement.
“As the President of TierOne Bank, Laphen engaged in a cover-up conspiracy directed by bank CEO Gil Lundstrom to understate losses and use unrealistic loan collateral values to make it appear that the bank met required capital ratios.”
“Chief Credit Officer Langford conspired with them to create a second set of books for regulators — one that hid astronomical write downs in loans — in what bank officers referred to as ‘smoke and mirrors’ and ‘hiding the ball.’ TARP capital was not designed to fund fraud, and SIGTARP stands united with DOJ Criminal Division to fight crime related to TARP,”
Which leads to this comment I received about former CEO Gil Lundstrom:
I don’t know the details surrounding Lundstrom or what he and his team did, and perhaps it is heinous. But it is turning my stomach week after week to see all these community bankers with respected careers roasted on public spits this way with the crowing and self-serving comments coming out of the FBI when they’re convicted.
It’s a sad day, not a happy one for anybody. And I can’t help but feel if the authorities had any ***** at all, it wouldn’t be the small community bankers being jailed, it would be the ones we all call too big to jail.