The former CEO and the former vice president for lending at American Mortgage Specialists were sentenced to 96 and 188 months, respectively, in federal prison for their role in a $28 million scheme to defraud North Dakota-based TARP recipient BNC National Bank.

The sentence was announced the Special Inspector General for the Troubled Asset Relief Program.

The officers, Scott Powers and David McMaster, were also ordered to pay a money judgment to the government of approximately $28 million and also to pay restitution to BNC in that same amount.

American taxpayers invested $20 million of TARP funds in BNC to stabilize the bank, according to inspector general Christy Romero.

“Powers and McMaster will have significant time in prison to think about how the fraud scheme they orchestrated for their mortgage business AMS left TARP recipient BNC National Bank with $28 million in losses and expenses and unable to repay TARP or make its TARP dividend payments for three years,” said Romero.

“BNC funded new mortgage loans by AMS and was supposed to be repaid when AMS sold the loans. However, AMS had a giant, multimillion dollar hole on its books and looked to BNC to fill that hole with more and more money by lying to BNC about the sale of loans," she added.