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Too Big to Jail? Not These Bankers

Attorney General Eric Holder ruffled feathers in March when he indicated during Capitol Hill testimony that some financial institutions are "too big to jail." Holder later tried to backtrack amid a fierce public outcry. The controversy comes on the heels of claims by some critics that the DOJ and Obama administration have given the politically well-connected banking industry an undeserved free pass in the wake of the financial crisis. As the following examples illustrate, however, the government has acted aggressively in some cases to bring senior bankers to justice-senior bankers at small institutions, that is. (Image: Bloomberg News)

Time for Tarp Fraudster Time for Tarp Fraudster

Gary Hall Jr. pleaded guilty last week to charges of defrauding the failed Tifton Banking in Georgia, which has received funds from the Troubled Asset Relief Program. Hall faces 65 months in prison; his sentencing hearing is set for Sept. 30. (Image: Bloomberg News)

Georgia's Bank Fraud Problem Georgia's Bank Fraud Problem

Georgia leads the nation in failed banks, and many of the bankers behind bars hail from the state. They include S. Pope Cleghorn Jr. of Hometown Bank of Villa Rica; Mark Conner of FirstCity Bank; Jeffrey Levine of Omni National Bank; and Adam Teague of Appalachian Community Bank. (Image: Thinkstock)

Busted for Mortgage Fraud Busted for Mortgage Fraud

Catherine Kissick was sentenced to eight years in prison for her role in fraud at Colonial Bank, where she was head of a mortgage warehouse lending operation based in Orlando, Fla. Lee Farkas, former CEO of Taylor Bean & Whitaker, is also behind bars for fraud that contributed to Colonial's failure. (Image: Bloomberg News)

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Bribes and Tax Evasion Bribes and Tax Evasion

Some jailed bankers worked at banks that are still in business. Danilo Perez, a former vice president of Ocean Bank, an active $3.3 billion-asset institution in Miami, Fla., was sentenced to 37 months for tax evasion and participating in a scheme to accept bribes. (Image: Thinkstock)

30 Months for Book-Cooking 30 Months for Book-Cooking

When New Frontier Bank in Greeley, Colo., failed in April 2009, regulators were unable to find a buyer. Gregory Bell, a New Frontier officer, was sentenced to 30 months for false bank entries, bank misapplication, bank fraud, and money laundering. (Image: Bloomberg News)

Nailed for Masking Bad Assets Nailed for Masking Bad Assets

Edward Woodard, founder and CEO of the failed Bank of the Commonwealth in Norfolk, Va., was convicted with several colleagues by a federal jury last month of masking non-performing assets for their own personal benefit and to the detriment of the bank. Woodard-whose son likewise worked at the bank and was convicted of fraud-is out on bond after seeking a new trial, according to a government spokesman. (Image: Andy Peters)

Paying for a Lie Paying for a Lie

Jerry Williams, former CEO of Orion Bank in Naples, Fla., was sentenced to six years in prison for lying to regulators.

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Caged in Cajun Country Caged in Cajun Country

Reginald Harper was sentenced in April to two years in prison for running a mortgage-fraud scheme at First Community Bank in Hammond, La. He is serving time at a federal prison in Pollock, La. (Image: Thinkstock)

Attorney General Eric Holder ruffled feathers in March when he indicated during Capitol Hill testimony that some financial institutions are "too big to jail." Holder later tried to backtrack amid a fierce public outcry. The controversy comes on the heels of claims by some critics that the DOJ and Obama administration have given the politically well-connected banking industry an undeserved free pass in the wake of the financial crisis. As the following examples illustrate, however, the government has acted aggressively in some cases to bring senior bankers to justice-senior bankers at small institutions, that is.

Comments (2)
SIGTARP and the FDIC did most of the heavy lifting on these cases. The Attorney General and other federal financial regulatory agencies have yet to apply the same enforcement zeal that was used against the officers of these small- and medium-size banks to their counterparts at the Too Big To Behave banks that caused the US financial crisis. As a result, these institutions consider themselves Too Big To Prosecute and continue to flout regulations, domestically and internationally.
Posted by jim_wells | Monday, June 24 2013 at 3:22PM ET
This article makes the point that ICBA has been making since the beginning of the crisis. If you are from a "too small to save" community bank that got into deep trouble or failed, you better watch out, because DOJ and the regulators are going to pursue you in the courts. If you are a director or senior executive of a too big to fail bank, enjoy your bonus and Hamptons address.
Posted by commobanker | Monday, June 24 2013 at 4:10PM ET
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