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Court Sentences Bank Execs for Trying to Bilk TARP

A U.S. federal judge handed prison sentences and $100 million in fines to two former bank officials and a borrower Thursday for their roles in trying to bilk the ""Troubled Asset Relief Program"":http://www.federalreserve.gov/bankinforeg/tarpinfo.htm (TARP) during the financial crisis.


Former Orion Bank EVP Thomas Hebble and SVP Angel Guerzon, along with onetime borrower Francesco Mileto, received time in federal prison for falsifying information about bad loans under the pretenses that their financial institution qualified for bailout funds from the federal government.

In May this year the three pled guilty to conspiracy charges for seeking to finance the sale of promissory notes connected to bank-owned properties with bailout funds.

""These three co-conspirators are added to the growing list of criminals who will serve jail time for fraud that includes an attempt to use TARP rescue funds,"" ""Christy Romero"":http://www.sigtarp.gov/about_ig.shtml,


TARP's acting special inspector general, said in a ""statement"":http://www.sigtarp.gov/press/2011/Orion_Bank_Sentencing_Press_Release.pdf.

She said in the statement that Hebble and Guerzon misrepresented the bank's accounts and called their investments ""nothing but an illusion.""

According to the statement, the two executives unsuccessfully applied for $64 million in federal assistance from the ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx. The three participated in the plot by withholding information about the sale of bank stock to Mileto in order to secure TARP assistance under false pretenses.

Hebble, Guerzon, and Mileto lied to federal and state authorities over a seven-month time frame that lasted from May to November 2009 by failing to disclose $15 million in financing for a stock purchase by the latter.

The bank ultimately failed in November 2009, following which state regulators appointed the ""FDIC"":http://www.fdic.gov/ to serve as receiver in the closure.

In line with the sentences, the FDIC requested $33 million in restituted funds from Hebble and Guerzon and about $65 million from Mileto.

Hebble, Guerzon, and Mileto ""lied to regulators that the bank's capital had improved, attempted to get $64 million in TARP funds to fill the hole that turned out to be fraud, and drove the bank into the ground,"" Romero added.""Fraudsters who tried to profit from TARP's bailout during the financial crisis will meet swift justice by SIGTARP and its law enforcement partners.""

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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