An executive at Calvert Financial in Ashland, Mo., has admitted to using funds from the Troubled Asset Relief Program to buy a luxury condominium.
Darryl Lane Woods, the $58 million-asset company's president and majority owner, pleaded guilty on Monday to misleading federal investigators about the misuse of Tarp funds, the Special Inspector General for Tarp announced on Tuesday. Woods, who was also chairman and chief financial officer of Calvert's Mainstreet Bank, admitted that he failed to disclose that he used $381,000 to buy a condo in Fort Myers, Fla.
Woods pleaded guilty to making a false statement and agreed to have no further involvement with the banking industry without the approval of federal regulators. He faces up to one year in prison and a $100,000 fine, in addition to restitution payments.
A Mainstreet spokeswoman said the company had no comment; she declined to say whether Woods has left his posts at Mainstreet and Calvert. As of Tuesday afternoon, Mainstreet's website still listed Woods as chairman and CFO. The website also lists Woods as a licensed lender for loan applications.
Under his plea agreement, Woods would be required to leave his posts with the bank and its holding company at the time of his sentencing, but could remain majority owner of Calvert by placing his shares in a blind trust, said Don Ledford, a spokesman the U.S. Attorney's Office for the Western District of Missouri, which prosecuted the case.
"The purpose of Tarp is to promote financial stability and lending in a time of national economic crisis, not to bankroll the purchase of luxury vacation properties for bank executives," said Christy Romero, Special Inspector General for Tarp, in a press release announcing the guilty plea.
Calvert received about $1 million of Tarp funds in January 2009. Woods bought the condo less than a month later. On Feb. 9, three days after the government began requiring Tarp recipients to disclose how they intended to spend the funds, Calvert issued a disclosure that failed to mention the condo.
In June 2012, the Federal Reserve Board issued an enforcement action against Calvert requiring it to raise capital and improve board oversight. The company had a Tier 1 leverage ratio of 9.35% and a total risk-based capital ratio of 16.71% as of June 30, according to the Federal Deposit Insurance Corp.