Thomas Wu, Bent Banker Indicted For Taking Bailout After Defrauding Investors

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In a case that should resonate with the protesters down in Zuccotti Park, three San Francisco bank officials have been charged with fraud after receiving nearly $300 million in federal bail out money during the Bush era financial crisis.

United Commercial Bank CEO Thomas Wu, along with vice presidents Ebrahim Shabudin and Thomas Yu, allegedly falsified financial records and lied to auditors just prior to getting a $298 million bailout in October, 2008 from Bush's Troubled Asset Relief Program, authorities said. Craig On, the bank's ex-CFO, was accused of misleading auditors and assisting in filing false financial statements. Their motive, court records show, was to hide the true amount of their losses.

Federal prosecutors in San Francisco, the Securities and Exchange Commission and the Federal Deposit Insurance Corp. were involved in the investigation. In all, 19 people were caught up in the probe. The case is the latest of a couple of dozen bank and other financial institutions caught trying to defraud the TARP funds. Others included the Park Avenue Bank CEO who attempted to steal $11 million in TARP funds, and Bank of America's former CEO and CFO, who failed to "misrepresentations" to the feds to get tens of billions in TARP funds. (The case was settled for $150 million.)

The fraudulent behavior at United Commercial Bank concealed $65 million in operating losses, leading the state government in California to shut down the bank. It was the 9th largest bank failure of the crisis of 2008, according to the SEC. The bank's failure cost the FDIC $2.5 billion in insurance losses.

"Today's charges reflect an all too familiar pattern - corporate executives once seen as rising stars embrace deception to avoid losses and conceal negative news, with investors and the FDIC insurance fund left to pick up the pieces," said Robert Khuzami, Director of the SEC's Division of Enforcement in a statement.

Who were the victims of the fraud? "Mostly regular people who bought the bank stock because they viewed it as a good investment," says Larry Rosen, who represents the plaintiffs in a class action lawsuit against the bank.

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1 comments
Tuxtux87
Tuxtux87

ok guys i used to work for bank of america in San Jose Costa Rica , specifically in the credit card department , and i do know what I am writing here. Bank of America is exploiting their employees in San Jose Costa Rica , they are making them work long hours whiteout no rest at all , and paying them very miserable salaries, These people are a bunch of scumbags i HATE them and despise them with all my guts! they are making their employees take an overwhelming amount of calls per day, An average customer service representative takes around 350 calls in a 7 hours day shift!!!!  these sons of bi**ches are burning in hell , they are the worst company here in San Jose Costa Rica to work for!! they are slavering people here!

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