A former chairman of the failed Premier Bank in Wilmette, Ill., has been charged with fraud in what prosecutors say is the first criminal case tied to the Troubled Asset Relief Program.

Zulfikar Esmail was charged with financial institutions fraud and with organizing a financial crimes enterprise, Crain's Chicago Business reported Tuesday. The Illinois Attorney General also charged Esmail's wife and two former Premier directors. The group was indicted Tuesday in Cook County Criminal Court. The Esmail-led scheme cost the U.S. Treasury Department $6.8 million in Tarp funds, Crain's reported.

Prosecutors claim that Esmail attempted to "shake down" one of the bank's largest borrowers, Michael's Fresh Market, while requiring it to give the bank equity in its developments in exchange for loans. Esmail allegedly took money from Premier to pay for inappropriate personal expenses, such as renovating his home.

Regulators closed the $269 million-asset Premier Bank in March 2012 and sold its assets to International Bank of Chicago.

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