First Case of Alleged Bailout Fraud

USA Today reports that ex-bank president Charles Antonucci has become the first person charged of attempting to defraud the federal bailout program (note: this should not surprise any regular FraudBytes readers).  According to the article:

Among other allegations, Antonucci was accused of using false information to request $11.3 million from the federal government's TARP bank bailout program.

...Antonucci lied to banking authorities in late 2008 and early 2009 to make them believe he had invested $6.5 million of his own money in the bank when the money actually belonged to the bank and had merely been moved around to make it seem as if it came from Antonucci.

The prosecutor said it was the "functional equivalent of Monopoly money" and was meant to convince federal authorities he should qualify for TARP money, a program to aid struggling banks that was announced on Oct. 14, 2008.

Fortunately, this story didn’t end in a huge loss for the federal government--Antonucci's TARP application was denied:

After the application for TARP money was rejected on Feb. 24, 2009, Antonucci did a media interview in March 2009 in which he said the bank withdrew its application because of "issues" with the TARP program and a desire to avoid "market perception" that bad banks take TARP money, the complaint said.

Federal authorities say Antonucci actually wanted to obtain millions of dollars for his own use, in part so he could obtain a controlling interest in the bank.

Score one for federal oversight!  Still, I wouldn't be surprised if we start seeing many other similar headlines, with less fortunate endings, in the days to come.