Fraud Friday — SIGTARP Scorecard, 58 Community Banker Convictions

August 12, 2016

By Bob Coleman
Editor, Fraud Friday

Fraud Friday — SIGTARP Scorecard, 58 Community Banker Convictions

SIGTARP (Special Inspector General for the Troubled Asset Relief Program) touts the number of bankers charged with criminal or civil fraud just broke the 100 person mark.

Of course, unmentioned is the fact community bankers are going to jail while the too big to jail bankers are writing checks.

Compare the fates of executives at a Virginia community bank versus the Bank of America’s.

The 70-year old Bank of the Commonwealth CEO Edward Woodard, Jr. drew a 23 year jail sentence for fraud that resulted in a $263 million loss to the FDIC. Two others received 17 and eight year terms.

Bank of America suffered billions of dollars in losses from toxic mortgages, but no criminal charges were filed against Bank of America executives. CEO Ken Lewis paid $10 million and the bank paid $16 billion in fines.

“SIGTARP’s unrelenting pursuit of justice has already resulted in charges against more than 100 bankers, and we expect more bankers to be indicted” crows Special Inspector General Christy Goldsmith Romero.

“Many masked their banks’ financial condition by hiding and lying about past-due loans, hoping that their criminal activity would avoid charge offs. Instead, bad money went after good, creating vicious cycles that eviscerated capital. Employees, businesses, and shareholders have suffered, sending shockwaves through not just local communities but regional economies and even the national economy. We will pursue justice for bankers who break the law and we will investigate to the highest levels of a bank. Full and sustained recovery of our banking system and the American people’s confidence in our banking and justice system depends on accountability and justice at all levels.

“I am extremely proud of SIGTARP agents and investigators who consistently find the evidence needed to prosecute bank officials. Finding crime committed by bank insiders that was purposely hidden in complex transactions is challenging. SIGTARP special agents and investigators have honed an analytical, experienced-based approach to see through concealed fraud. I also commend our prosecutorial, civil, and investigative partners who stand with us to stop and catch bankers committing crime and civil fraud.”