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Lending

SIGTARP's reach is long; its sentencing guidelines, sharp

Even smaller banks and their employees face scrutiny

November 25, 2013

Back in 2008, Congress created the Office of the Special Inspector General for the Troubled Asset Relief Program to oversee all waste related to the $700 billion TARP program.

TARP, of course, provided liquidity to U.S. banks in the form of asset and equity purchases after the financial crisis, serving as a make-shift liquidity program at a time when financial firms faced a cash crunch.

But looking at the inspector general reports coming out of SIGTARP today, it’s clear all banks that took funds — no matter how big or small — and their employees are unable to escape taxpayer scrutiny with SIGTARP Inspector General Christy Romero continuing to aggressively hunt for instances of abuse.  

Her agency is dedicated to ensuring all TARP recipients — and employees receiving funds — are operating in an ethical fashion and not abusing funds that may tie back to the signature bailout program.

Looking at the latest case from SIGTARP, it’s clear the agency’s outreach and discovery efforts run deep, impacting banking professionals who seem small in the grand scheme of things.  

The latest person to plead guilty for defrauding TARP banks is not even a major banker, but a bank employee who accepted bribes while working at a TARP-recipient bank. 

SIGTARP announced that Wilbur Tate, III, 49, of Dacula, Ga., pleaded guilty to accepting bribes while working at U.S. Bank in Ohio.

The agency claims Tate accepted $24,000 in kickbacks from debt collection firm, Oxford Collection Agency, in exchange for U.S. Bank’s collection contracts.

"While the country struggled through the financial crisis, rather than collect the debts of TARP banks, executives at Oxford ripped-off TARP banks in a $12 million debt fraud scheme, and Tate shared in their spoils," SIGTARP claims. "Tate took bribes which began with expensive cigars and escalated to cash payments of as much as $5,000 per month disguised in cigar boxes." 

Tate allegedly received some of the funds that Oxford employees collected on behalf of TARP banks, SIGTARP claims.  

Tate, then an assistant vice president at U.S. Bank, ended up in SIGTARP’s crosshairs as they investigated the recipient bank. Tate was arrested earlier this year and officially pleaded guilty to one count of conspiracy to commit bank bribery.

The case shows how SIGTARP’s investigative reach runs deep, prodding into all banking affairs that link back to the TARP program in any shape or form.

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