The former chairman of the failed Premier Bank in Wilmette, Ill., was sentenced to five years in prison after he pleaded guilty to defrauding the Treasury Department's Troubled Asset Relief Program.

Zulfikar Esmail, 73, pleaded guilty to one count of financial institution fraud of more than $100,000 and an amended count of theft from Tarp of more than $100,000 at the Cook County Circuit Court on Tuesday. Esmail's wife, Shamim, 68, who was a senior executive at the bank, pleaded guilty to the same counts and was sentenced to probation for two years and 250 hours of community service.

The Treasury Department provided Premier Bank with about $7 million in bailout funds in the wake of the financial crisis, according to Crain's Chicago Business.

The Illinois Department of Financial and Professional Regulation closed Premier Bank in March 2012 and the Federal Deposit Insurance Corp. was named receiver. The bank then had about $268.7 million of assets and $199 million of deposits. The International Bank of Chicago purchased all of the assets and assumed all of the deposits of the failed bank.

According to Illinois Attorney General Lisa Madigan, the Esmails schemed to defraud Tarp out of $6.8 million and covered up the poor financial condition of the bank by using money from third parties to make up payments on numerous past-due loans. The couple concealed the bank's finances from state regulators until the bank failed, which cost the FDIC about $64.1 million. The bank officers during that time submitted numerous fraudulent reports to the Illinois Department of Financial and Professional Regulation that misrepresented the condition of the bank's loans and lines of credit.

"This couple fraudulently secured Tarp funds at a time when the country's economy and its major financial institutions were on the brink of disaster," Madigan said in a press release. "Their illegal scheme ultimately resulted in the failure of a bank at a great cost to the bank's customers and American taxpayers."

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