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Park Avenue Bank CEO Arrested for TARP Fraud

By: Selena Robinson, Freelance Journalist for WorldNewsVine

Manhattan, New York – Earlier today, the Federal Bureau of Investigation, along with five other government agencies, announced the arrest of Charles J. Antonucci, Senior, ex-CEO of Park Avenue Bank. Authorities say that Antonucci made fraudulent claims in an attempt to receive federal bailout funds from the Troubled Asset Relief Program (TARP). Antonucci is the first person ever charged with TARP fraud.

According to the FBI press release, Antonucci is charged with multiple crimes, including embezzlement, wire fraud, bank fraud, bank bribery and lying to investigators. Officials say that his criminal activity began long before he tried to scam the TARP program. Park Avenue Bank was a respectable, relatively stable institution when he became the CEO in 2004. But, in the five years that he oversaw the bank, investigators say that Antonucci “engaged in numerous instances of self-dealing…including authorizing extensions of credit and overdrafts to customers with whom he had financial relationships; authorizing extensions of overdraft credit to a customer in exchange for the use of a private plane; and causing the bank to make improvements on, lease, and pay expenses for properties owned by (himself)”. So, basically, everything you’re NOT supposed to do when you’re running an institution insured by the federal government.

One of the most egregious offenses by Antonucci involved a company called Easy Wealth Group, Ltd. The president of the company received a $400,000 line of credit from Park Avenue Bank, using deceptive financial statements and information for the credit application. Guess who owns Easy Wealth Group? Yep, Antonucci, who essentially gave himself $400,000 from the bank that he was running. He got an associate of his to become Easy Wealth’s “president” and apply for the loan. To add insult to injury, he then demanded that the “president” pay him $70,000 of the money as an interest-free loan. He only repaid $50,000 of it. The entire $400,000 loan was defaulted on.

None of this may have come to light, though, if Antonucci hadn’t applied for TARP money. The TARP funds, also known as the Wall Street bail-out, were the funds that the government set aside to boost financial institutions that were stuck holding toxic assets from the mortgage meltdown. Remember that big stink with AIG and Lehman Brothers and all the rest of it? Well, Antonucci apparently decided that his bank was also “too big to fail” and asked Uncle Sam for a loan.

The trick to getting TARP money is to look like you have done your part to make your bank solvent, such as investing some of the money you’re burning at home. To get by this rule without actually losing any of his money, Antonucci arranged for $6.5 million of the bank’s funds to be withdrawn into corporations that he was connected with, so that he could then withdraw it again and then deposit into the bank. Then he could go to the federal regulators and say, “See! I gave my bank $6.5 million! I’m committed to keeping my bank afloat.” Except that it was the bank’s own money. When the FDIC began to investigate, they told Antonucci that his TARP claim would be denied.

To cover his tracks with the public, Antonucci gave an interview explaining why the bank had withdrawn its application for TARP funds. He told Information Security Media Group, “Nobody really knows what the rules are going to be in terms of those who take and utilize the TARP money, and that is very unsettling…I don’t need TARP money…management is committed to putting capital in as it is needed.”

The Federal Deposit Insurance Corporation (FDIC) seized Park Avenue Bank on March 12, 2010. All deposits were assumed by Valley National Bank. Mr. Antonucci is charged with 10 counts of fraud and lying. If convicted on all counts, he faces up to 260 years in prison.

Posted by on March 15, 2010. Filed under Banking and Finance,Crime - Punishment,Money,National News,News,News and Opinions with Selena Robinson,WorldNewsVine. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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