After aggressive and risky loan-fueled growth, management of TARP recipient United Commercial Bank (UCB) fraudulently inflated the bank's
financial performance by hundreds of millions of dollars. This crime led to one of the largest bank failures since the Great Depression and
the loss of $300 million in TARP funds.
Instead of relying on traditional notions of bank fraud, SIGTARP compared UCB's bank information to red flags we developed. This approach
helped identify the hidden crime.
Electronics stored in a warehouse that served as collateral for a major loan turned out to be fake-staged like a Hollywood movie set. But
UCB did not write the loan down.
UCB's former chief credit officer was sentenced to eight years in prison and ordered to repay $298 million to TARP. The former chief
financial officer and former vice president were also convicted.
This case and others - including Colonial Bank, Bank of Commonwealth, and TierOne Bank - have brought accountability to senior bankers who
tried to get taxpayer funds to cover up losses created by risky lending.