The former President and Chief Executive Officer (CEO) of Park Avenue Bank in New York was arrested for defrauding the Federal Deposit Insurance Corporations (FDIC) and for creating fraudulent certificates of deposit, among other infractions. At the beginning of March, The Park Avenue Bank in New York was closed by bank regulators, making it the 28th bank to fail so far in 2010. The arrest of former chief executive officer, Charles Antonucci Sr., who resigned last year, is the first time criminal charges have been filed because of alleged abuse of one the federal government’s bailout programs.
The Accusations
The criminal complaint filed against Charles Antonucci Sr., charges the former CEO with ten counts of criminal misconduct. The details of the complaint were revealed on March 15, 2010 in a federal court in Manhattan. The criminal counts allege that the former president and chief executive officer of The Park Avenue Bank planned to defraud the bank and its regulators. Federal investigators involved with the case allege Antonucci attempted to obtain $11.4 million from the Treasury Department’s Troubled Assets Relief Program (TARP) by underreporting the bank’s level of capital when the TARP application was submitted in November 2008. Antonucci told the bank’s regulators that he invested $6.5 million of his own personal funds into the bank to help increase its capital level. Even though the investment Antonucci made was $6.5 million, investigators say the personal investment was made in what they describe as an “elaborate round-trip loan transaction” created and implemented by Antonucci.
The U.S. attorney for the Southern District of New York, Preet Bharara, says of Antonucci, “He deliberately and repeatedly deceived regulators. Antonucci is the first person ever to be charged with attempting to defraud the TARP. And we suspect he will not be the last.”
The Charges
Eight of the ten charges Antonucci is facing were revealed to the public. These include making counterfeit certificates of deposit, wire fraud, embezzlement, bank bribery, bank mail fraud, fraud on the Federal Deposit Insurance Corp. and making false statements on the TARP application.
The Outcome
Since this is the first time criminal charges have been filed against someone for TARP infractions, the court and Antonucci himself are maneuvering in unchartered waters. The Park Avenue Bank was seized on Friday, March 12, making it one of three banks taken over by bank regulators. The Federal Deposit Insurance Corporation estimates its loss at $50.7 million for the Park Avenue Bank failure. The special inspector general assigned to oversee TARP says, “The charges today should send a powerful message to those who have tried to steal from the TARP, those who have stolen from the TARP and those who are contemplating similar fraudulent action.”
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