Special Inspector General for TARP Christy Goldsmith Romero has issued a press statement concerning the sentencing of former officers of TierOne Bank, which was a $3 billion publicly traded commercial bank formerly headquartered in Lincoln, Neb., that was shut down by the Federal Deposit Insurance Corporation in June 2010.
Gilbert G. Lundstrom, of Lincoln, Neb., the former CEO of TierOne Bank, had previously been sentenced to 11 years in prison and ordered to pay a $1.2 million fine for orchestrating a scheme to defraud TierOne's shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate. Lundstrom had applied for $86 million in TARP funds on behalf of the bank.
Romero stated: "As the President of TierOne Bank, Laphen engaged in a cover-up conspiracy directed by bank CEO Gil Lundstrom to understate losses and use unrealistic loan collateral values to make it appear that the bank met required capital ratios. Chief Credit Officer Langford conspired with them to create a second set of books for regulators--one that hid astronomical write downs in loans--in what bank officers referred to as 'smoke and mirrors' and 'hiding the ball.' TARP capital was not designed to fund fraud, and SIGTARP stands united with DOJ Criminal Division to fight crime related to TARP."