In a case of a bank manager acting like a bank manager, a Missouri bank chairman admitted earlier this week that he misappropriated nearly $400,000 worth of TARP money -- and instead bought a luxury home in South Florida.
According to court documents filed on Tuesday, the money, which the government had allocated Darryl Layne Woods, 48, as the Great Recession hit its nadir in early 2009, was plowed into a "luxury condominium" in Fort Myers.
Hit with the indictment, Woods -- the CFO and chairman of an Ashland, Missouri, bank called Mainstreet -- immediately pleaded guilty on Tuesday.
U.S. Attorney Tammy Dickinson puts it into context for us:
"At a time when other Americans were losing their homes, he was siphoning off public funds to buy a luxury vacation condo in Florida," she said. "These federal funds were intended to help stabilize the economy during a fiscal crisis. Instead, this disgraced business leader took advantage of the situation to benefit himself and other bank executives, then lied to federal investigators in an attempt to hide his scheme."
We got bamboozled by the banks!
If you would recall, TARP was that incredibly controversial -- though arguably necessary -- measure President George W. Bush took in 2008 that injected money into troubled banks to help them secure toxic assets, most likely subprime mortgages.
But Mr. Woods wasn't going to play like that. And his actions fit a larger pattern of bank owners, vested with the public trust to fix their problems so the entire boat wouldn't sink, acting with selfishness and greed.
Earlier this week, former U.S. Treasurer Henry Paulson, who had orchestrated TARP, had some reservations about how well the deal did. "There was such a total lack of awareness from the firms that paid big bonuses during this extraordinary time," he said.
Christy Romero, a special investigator for TARP, said Woods first applied for the TARP money but then didn't use it the way he said he would. "He failed to tell the truth and, within days of receiving the TARP funds, spent more than a third purchasing a waterfront condo in Florida for his and other executives' use."
It's not mentioned in the court documents which condo, specifically, Woods bought. (There are many in South Florida.)
Woods may spend as much as one year in federal prison and face a fine of $100,000 and an order of restitution. His sentencing hasn't been scheduled yet.