We Finally Have A Case Of Bank TARP Fraud

Turns out that Wilmington Trust Corp. is the only bank in America to have committed a crime with TARP funds.
Author:
Updated:
Original:

First DuPont, now this: Tough times in Wilmington, Del.

Since its inception in the dark days of 2008, the Troubled Asset Relief Program has been beset by its troubled self.

Some have taken advantage of the $430 billion the Treasury doled out more or less blindly, notably the banks themselves, which took the money but didn’t actually use it for things the government hoped they would. Some bank employees also committed crimes to get their unfairshare of it. Some might even say that TARP itself was a great crime against the American taxpayer and the American way of life (And, yes, some of those people might now be running for president).

But no one has accused any bank of actually committing a crime against TARP, or at least no one with the power to indict. That is, until now.

A federal grand jury has criminally charged Wilmington Trust Corp., an unusual move that marks the first time a bank that received federal bailout money has been indicted….

The grand jury returned a second superseding indictment Wednesday that added Wilmington Trust as a defendant to the indictment already pending against former senior bank executives David Gibson, Robert V.A. Harra, William North and Kevyn Rakowski.

Wilmington Trust criminally charged [News Journal]
M&T’s Wilmington Trust indicted in U.S. over loans [Reuters]

Related

TARP Charts!

The Federal Reserve has this new paper out about TARP that does a bit of highly suggestive eyebrow raising about some banks that shall remain nameless. They start from the awkward fact that TARP wanted everything in one bag but didn't want the bag to be heavy, or as they put it: The conflicted nature of the TARP objectives reflects the tension between different approaches to the financial crisis. While recapitalization was directed at returning banks to a position of financial stability, these banks were also expected to provide macro-stabilization by converting their new cash into risky loans. TARP was a use of public tax-payer funds and some public opinion argued that the funds should be used to make loans, so that the benefit of the funds would be passed through directly to consumers and businesses. So you might reasonably ask: were TARP funds locked in the vault to return the recipient banks to financial health, or blown on loans to risky ventures, or other? Well, here is Figure 1 (aggregate commercial and industrial loans from commercial banks in the U.S.): So ... not loaned then. But that's not important! The authors are actually looking not primarily at aggregate amounts of loans but at riskiness of loans and here's what they get:

Rep. Blaine Luetkemeyer opening his early Valentine's Day cards from bank lobbyists. (Rep. Blaine Luetkemeyer)

Banks Ask Congress To In-Source Money Laundering So They Don’t Have To

First on the G.O.P.’s banking agenda in 2018: Making sure banks don’t have to spend their tax savings figuring out who the bad guys are.

citi-frown

Citi Mexico Unit Has Final Bout Of Montezuma’s Revenge

Banamex USA’s final gift to Mike Corbat is a $97.4 million bill from Jeff Sessions.

By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

If It Takes Seven Years To Build A Simple Bribery Case, It’s Probably Not Worth It

The only bankers to face a British jury over financial crisis shenanigans walk free.

Screen Shot 2019-01-14 at 3.42.23 PM

Danske Bank In Real Trouble Now That Inspector Clouseau Is On The Case

The Danes have to translate everything into French now.

House of Iniquity and Ineptitude. By Dan SmithRdsmith4 (Own workOwn work) [CC BY-SA 2.5], via Wikimedia Commons

Banks Have A Right Mind To Sue The Fed Over Stress Tests

Apparently said tests are illegal, according to a group whose members "include senior executives at big banks J.P. Morgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc., Wells Fargo & Co., and State Street Corp."