by Brian Mahany
Many folks have grumbled about the billions of dollars in bailout funds given to big banks. Prior to 2008, no one had heard the phrase “too big to fail.” Now it is common when referring to certain large banks, brokerage firms and insurance companies. The federal bailout monies were made available through TARP, short for the Troubled Asset Relief Program. Whereas most of the money went to troubled banks, some of the that money was apparently misappropriated by greedy bankers.
By April of 2011, 38 banks had already failed that year. Over one quarter of those failed banks were in Georgia. One of those banks was The Park Avenue Bank. When Park Avenue went under, the FDIC paid about $308 million to get Bank of the Ozarks to take over the failed bank’s operations. Where did that money come from? It came from the FDIC and the TARP program. Ultimately it came from you and I and all other taxpayers.
If the bank really went under because of tough time, some might understand a bailout of that size. Whether right or wrong, the government made a committment to prop up the banking industry and boost confidence in the nation’s banking system. It also had to back the FDIC which was pouring in billions of dollars to protect the deposits of American banking customers.
Unfortunately, we now know that The Park Avenue Bank didn’t need such a large bailout.
A couple years ago, the feds indicted Park Avenue’s CEO, Charles Antonucci. He was charged with defrauding the TARP program and bribery. As if all of his other charges were not already serious enough, prosecutors say that Antonucci was taking bribes from bank clients and embezzling money from the bank.
Antonucci ultimately pleaded guilty to some of the charges and is awaiting sentenced in April of 2013. If you think the story ends there, it doesn’t.
Three more people connected to the failed bank have now been arrested. So where did all of our hard earned tax dollars go? The U.S. Attorney says private planes, expensive jewelry, Super Bowl tickets and the like.
Whereas Antonucci was accused of “only” attempting to steal $11 million, an FBI press release says that some of the new indictees were part of a scheme involving $100,000,000.00.
While an indictment is only an allegation of misconduct, the array of agencies lines up on this case is impressive. The United States Attorney, Department of Justice, Federal Bureau of Investigation, Internal Revenue Service, FDIC Inspector General and the New York State Department of Financial Services to name a few. Even Immigration and Customs Enforcement jumped in on the action. Federal law enforcement may not alway be the fastest but they are thorough.
This case results from the collapse of The Park Avenue Bank and an Oklahoma insurance company that one of the defendants also allegedly looted. Often times, however, frauds are uncovered when a concerned employee, former worker or vendor comes forward. The Park Avenue Bank case was prosecuted in Manhattan federal court. That is the same place that the case against Allied Home Mortgage was filed – currently the Allied case is the largest federal false claims act case against a lending institution. $2.4 billion. The Allied case was originally filed by our office and is a whistleblower case.
We mention this because there are thousands of undiscovered frauds involving tens of billions of dollars of waste, corruption, theft and ultimately, loss to taxpayers. Under the federal false claims act (sometimes called “FCA”, Lincoln law or qui tam), whistleblowers can receive up to 30% of whatever the government collects. That’s a nice reward for doing one’s civic duty and saving taxpayers money.
If you have information about a fraud that involves loss to taxpayers or government programs, give us a call. You may have great information but the law usually only awards the first person to come forward and file. We proudly represent whistleblowers and can help you collect your fair share of any awards. Recently, some folks have received awards in excess of $100 million. Not a bad pay day.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Services available in many jurisdictions.