Marketplace Scratch Pad

TARP fraud exposed

Scott Jagow Mar 16, 2010

The TARP watchdog, Neil Barofsky, warned us a year ago that the $700 billion program was ripe for fraud: “History teaches us that an outlay of so much money in such a short period of time will inevitably draw those seeking to profit criminally.” Well, he was right. The first criminal charges have been filed concerning abuse of TARP funds, and there are more cases on the way.

The charges were filed against the president of New York’s Park Avenue Bank, which was shut down by regulators last week. From the Washington Post:

Investigators said (Charles Antonucci Sr.) tried to fraudulently obtain $11.3 million from the Treasury Department’s Troubled Assets Relief Program by lying about the bank’s capital levels in its November 2008 application for bailout funds. He told regulators that he had invested $6.5 million of his personal money to boost the bank’s capital, the complaint said, even though the investment was made with the bank’s own funds through a “series of deceptive, round-trip loan transactions” devised by Antonucci.

Barofsky isn’t done sniffing out the TARP liars and cheats. Here’s what he said on Fox News today:

CAVUTO: How do you know others aren’t or weren’t doing the same thing when it comes to TARP? That, what, $700 billion-plus that’s been — gone out.

BAROFSKY: Well, others are doing the same thing.

CAVUTO: So, you suspect there will be more cases like that?

BAROFSKY: There will be more cases, both against applicants and TARP recipients. That’s what we were charged by Congress to do, and that’s what we’re doing, is uncovering those frauds.

Now, if we could just get some criminal charges filed concerning the events that led to the $700 billion bailout…

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