On Friday, regulators closed New York’s small Park Avenue Bank and the FDIC was named receiver.Now, the former president, Charles Antonucci, has been arrested on allegations of self-dealing, bank bribery, embezzlement, and fraud on the New York State Banking Department, FDIC, and TARP, an apparent first.
A press conference is planned this afternoon, but Dow Jones Newswires has the details.
Dow Jones: Prosecutors from the U.S. attorney’s office in Manhattan alleged the Antonucci engaged in several schemes to defraud the bank and its regulators, including engaging in self-dealing and obtaining illicit payments and benefits from bank customers — sometimes in exchange for inappropriate extensions of credit loans or loans to customers.
In one case, Antonucci engaged in a sham “round-trip” transactions designed to make it appear to bank regulators that he had invested about $6.5 million in the bank to improve its capital structure, but actually just took funds from the bank itself, prosecutors said.
Antonucci also allegedly made false statements and committed mail fraud in connection with an application by the bank for more than $11 million in TARP funds in 2008, using his purported $6.5 million investment as part of the basis for the application.
“Charles Antonucci allegedly put his personal greed ahead of his professional duty, deliberately and repeatedly deceived regulators, and even attempted to obtain through fraud $11 million in taxpayer rescue funds from the Troubled Asset Relief Program,” said U.S. Attorney Preet Bharara in a statement. “Regulators simply cannot do their job if financial institutions obstruct them. Lying to financial regulators is the economic equivalent of obstruction of justice.”
In March 2009, Antonucci claimed his bank did not need TARP money (the bank submitted and then withdrew an application), according to an interview in Bank Information Security.
Antonucci was also critical of Wall Street investment banks:
Antonucci: Wall Street is gone, which from a Main Street banker’s perspective is probably a good thing, because we are getting a splash of the problems that they created. And I think one of the big problems that the public has is they don’t see the distinction between what I do and what a Wall Street banker does. I make loans to companies directly. I make mortgages to people directly. There is no third party involved in what I do, so there is a relationship we have…
Update: Here’s the full indictment:
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