WASHINGTON — A federal judge Thursday sentenced former Voyager Bank Chief Executive Timothy Owens to 18 months in prison after he pleaded guilty to obstructing a Federal Reserve examination of his institution.
Owens was indicted by the U.S. Attorney's office in December 2014 and pleaded guilty to one count of obstructing an examination of a financial institution last July. Federal Reserve Inspector General Mark Bialek said the sentence should serve as a warning to other bank executives who attempt to flaunt the exam process.
"Mr. Owens' obstruction of a Federal Reserve Board examination is the type of criminal conduct that harms federal regulators' ability to appropriately supervise banking institutions," Bialek said. "Today's sentencing is another step in a joint effort with our law enforcement partners to hold accountable those who undermine the integrity of the examination process."
The Federal Reserve began investigating Voyager and its affiliate Voyager Financial Services Corp. in 2009 over concerns about improper loans made to bank insiders. The investigation found that Owens had been loaned more than $5.4 million by the bank and had purchased a letter of credit from another bank with Voyager's assistance for $7.5 million.
When the Fed sought documentation from Voyager's board supporting the loans and clarifying that they were issued in accordance with bank policy, Owens kept the board in the dark and issued his own response, which included false and misleading information pertaining to the loans. The response resulted in an inspector general investigation by the Fed and the Federal Deposit Insurance Corp., as well as the Federal Housing Finance Agency and the FBI.