by Christopher Zoukis
A new federal agency formed in 2008 has quietly been locking up bank executives who have misused public bailout funds.
Bankers who are prosecuted in federal court as a result of an investigation by the Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) are sentenced to an average of 69 months, roughly twice the length of sentences imposed on other white collar criminals, according to that agency. Some have been sentenced to as much as 23 years imprisonment, like Virginia bank executive Edward J. Woodward, who was also ordered to pay $333 million in restitution in connection with falsifying bank records to obtain federal bailout funds.
SIGTARP was created to supervise use of government bailout funds for the auto and finance industries. The agency has a staff of 170 and an annual budget of only $41 million, a fraction of the funds allotted to other regulatory agencies like the Security and Exchange Commission.
SIGTARP has pursued criminal charges against 107 senior bank officers since its inception, resulting in $4.7 billion in restitution paid to government agencies and victims. The agency oversees the activities of some 763 financial institutions that received funds from the $700 billion Troubled Asset Relief Program created in the last decade. SIGTARP’s success is due in part to its criminal enforcement authority given to it by Congress. SIGTARP can issue search warrants, seize property, make arrests and refer cases to the Justice Department for prosecution.
While Christy Romero, the Special Inspector General in charge of the program, lauds the program as “promot[ing] financial stability and lending in a time of national crisis,” some observers have noted that SIGTARP has not been successful in taking down Wall Street powerhouses and titans. Most bankers targeted by SIGTARP have been associated with community banks and local institutions. Mark Williams, a former bank examiner who teaches finances at Boston University, says, “The amount of direct evidence of banker wrongdoing in these smaller bank cases is easier to show.” Nonetheless, he said, “these SIGTARP cases set an important precedent that bad banker behavior will not be tolerated and [will be] aggressively prosecuted.”
“Essentially, we’re looking for lies and greed,” Romero said. “Usually, people have gone to such great lengths to try and hide the schemes that they end up violating several laws, which leads to long sentences.”
Sources: , https://mfi-miami.com/, www.allgov.com, www.fool.com, www.washingtonpost.com
[Originally published on Prison Legal News]