While most of the $700 billion in taxpayer funds that was pumped into the Troubled Asset Relief Program was put to good use, some of the fund’s recipients proved to be nefarious.
TARP was created
in the midst of the financial crisis through the Emergency Economic Stabilization Act of 2008, which was signed by President George W. Bush in October 2008.
In addition to saving financial institutions like Citigroup Inc. and American International Group Inc. from failure, TARP was used to fund the Obama administration’s Making Home Affordable initiative.
In all,
more than 700 financial institutions received TARP funds.
An announcement from the Department of the Treasury in December 2014 indicated that TARP brought in
$442 billion — $15 billion more than was disbursed.
But executives at some banks that received TARP funds were less than ethical.
A report from the Office of the Special Inspector General for the Troubled Asset Relief Program indicates that more than 300 defendants investigated by SIGTARP have been criminally charged.
The defendants are accused of masking the deteriorating conditions of their banks by falsifying their banks’ books, defrauding the banks, lying to bank examiners and deceiving investors of the banks.
Some officials at banks that received TARP funds
have been charged with embezzlement, money laundering, kickback schemes or other crimes that caused losses to their banks.
In addition, some of the banks’ large customers have been charged with conspiring with the bank insiders to hide their delinquent loans from the banks. Among bank customers who have been charged are
real estate developers and construction companies.
Customers conspired with bank officials to hide bad loans through sham transactions, fake capital raises and the use of friends or family members as straw borrowers.
Out of the more than 300 defendants charged, 223 have been convicted.
The average prison sentence for TARP-related crimes that were investigated by SIGTARP is five years.
