Ebrahim Shabudin, former chief operating officer and chief credit officer at United Commercial Bank in San Francisco, has been sentenced to 97 months in prison for securities fraud related to the bank's failure.

Shabudin, 66, conspired with others at United Commercial to falsify bank records in a scheme to cover up millions of dollars in losses, according to a Sept. 1 news release.

Shabudin's sentencing follows five years of investigations into United Commercial, the first bank to receive Troubled Asset Relief Program funds to fail, according to the Office of the Special Inspector General for the Troubled Asset Relief Program.

"This case is one of the most significant prosecutions for crimes arising out of the financial crisis and it is the most significant prosecution for crimes arising out of the Tarp bailout," Christy Goldsmith Romero, the Special Inspector General for Tarp, said in the release.

"Shabudin gambled with $300 million of taxpayer bailout money, all of which was lost when the bank failed," Romero said.

A jury found Shabudin guilty of seven crimes, including conspiracy to commit securities fraud, falsifying corporate books and records, false statements to accountants and making false bank entries. Shabudin was also sentenced to three years' supervised release and ordered to forfeit $348,000.

Two other former United Commercial employees — Craig On, who was chief financial officer; and Thomas Yu, a senior vice president — have pleaded guilty to conspiracy charges and await sentencing.

United Commercial received about $298 million in Tarp funds in 2008. The money loaned grew to over $300 million on rising dividends, with taxpayers left on the hook after the bank was possessed by the Federal Deposit Insurance Corp. in 2009.

The failure of United Commercial in November 2009, a $10.9 billion-asset bank at the time, resulted in about $677 million of losses to the Federal Deposit Insurance Corp.'s Deposit Insurance Fund. East West Bancorp in Pasadena, Calif., acquired United Commercial in a loss-sharing agreement with the FDIC.

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