Charles J. Antonucci, Sr., former President and Chief Executive Officer of Park Avenue Bank is the first to be criminally charged for attempting to defraud the Troubled Asset Relief Program (“TARP”). The case was unsealed in March in the southern district court of Manhattan.
Agents of the Special Inspector General for TARP (“SIGTARP”) participated in the investigation, a enforcement agency resulting from the recently passed Financial Fraud Enforcement Task Force established in November 2009. To date, the Inspectors General have received 1,771 complaints stemming from the $787 billion in spending under the American Recovery and Reinvestment Act of 2009. Those complaints, through February 2010, resulted in 49 referrals to the DOJ, of which the DOJ accepted 43 for criminal prosecution.
The complaint cites fraudulent conduct occurring between October 2008 and February 2009. Specifically, Antonucci was charged with making false statements in connection with his bank’s application for approximately $11 million in funds from the Capital Purchase Program of TARP. Through a “series of deceptive, round-trip loan transactions,” Antonucci claimed to banking authorities that he invested $6.5 million of his personal money in the bank — money that actually belonged to the bank.
Antonucci is also accused of extending credit and overdraft to customers with whom he had a personal financial relationship. In one instance, he allegedly extended credit to a customer in exchange for the use of the customer’s private plane. As a result, Antonucci could face up to 260 years in prison.
As is the case here, engaging in TARP fraud causes false or fraudulent claims to be presented to the government. Consequently, any person with knowledge of such fraud may bring a qui tam action under the False Claims Act.