Ex-head of New York bank sentenced to two-and-a-half years prison for TARP fraud
By Nate Raymond NEW YORK (Reuters) - A former president of a failed New York bank was sentenced to 2-1/2 years in prison on Thursday after becoming the first person to be convicted for trying to defraud the U.S. government bailout program established during the financial crisis. Charles Antonucci, Park Avenue Bank's former president, was ordered to serve prison time by U.S. District Judge Naomi Reice Buchwald despite cooperating with authorities, who ultimately charged three other people. "Even today I have not heard an excuse or explanation for this serious conduct," Buchwald said. "The only one that comes to mind is greed." Antonucci apologized in Manhattan federal court "to those who were harmed by my actions." The judge ordered him to forfeit $11.2 million and pay $54.6 million in restitution. Antonucci's guilty plea in 2010 to charges including securities fraud was in the first case involving a fraud tied to the Troubled Asset Relief Program, the initially $700 billion bank bailout program to help deal with the 2008 crisis. Privately-held Park Avenue Bank had $520 million in assets when in March 2010 the Federal Deposit Insurance Corp took it into receivership, selling its deposits to Valley National Bancorp . Antonnucci, 64, was arrested three days later as authorities accused him of engaging in illegal activities leading to the bank's demise. Prosecutors said Antonucci misled regulators who had been concerned about the bank's capital levels into believing he was investing $6.5 million in it. In fact, the money came from an round-trip loan transaction with the bank itself lending the funds, prosecutors said. Antonucci then used that transaction to support the bank's TARP application, which was ultimately denied, prosecutors said. In court papers, prosecutors said Antonucci's subsequent cooperation provided them information about related frauds that authorities had little to no information about. Three more people were charged in 2012, among them Wilbur Huff, a Kentucky businessman and bank client who was sentenced in June to 12 years in prison for a $53 million tax scheme and other frauds. Matthew Morris, Park Avenue's senior vice president, was sentenced Wednesday to one year in prison after pleading guilty to participating in the round-trip loan scheme and another fraud involving an illegal purchase of an Oklahoma insurer. Allen Reichman, an ex-Oppenheimer & Co Inc employee, was sentenced in July to 1-3/4 years in prison after admitting to being part of the scheme with the insurer, which ended up in receivership. The case is U.S. v. Antonucci, U.S. District Court, Southern District of New York, No. 10-cr-00922. (Editing by Grant McCool)
