A former executive for a Troubled Asset Relief Program (TARP) bank has been indicted in a bank fraud conspiracy. The announcement came from the Office of the Special Inspector General for TARP (SIGTARP), which commented that Gary Alan Rickenbach of Little Rock, Arkansas has been indicted on one count of conspiracy to commit bank fraud.
Rickenbach was also charged with misapplication of bank funds, making false entries to deceive the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), obstructing an OCC examination, and money laundering.
The indictment charges that Rickenbach, while SVP of Onebanc, conspired to make false loans for the purpose of hiding the bank's loss on a $1.5 million bad loan made in April 2007. Rickenbach and others hid the loss from federal examiners by making loans to entities he either created or controlled.
The SIGTARP release noted, "The new loans made by Rickenbach made Onebanc appear to federal examiners to have fewer financial problems than was true."
"Rather than deal with the reality of having made a $1.5 million bad loan that couldn't be collected, Rickenbach, a senior loan executive at Onebanc, and others, in early 2009, allegedly attempted to hide the loss from non-bank board members and federal regulators in order to conceal the bank's true financial condition, and Rickenbach looked to TARP money to fund his fraud," said Christy Romero, Special Inspector General for TARP.
According to TARP records, OneFinancial Corporation, the parent company of Onebanc of Little Rock, Arkansas, received $17.3 million in federal taxpayer money through TARP in June 2009.
"The $17.3 million TARP investment remains outstanding, and as of December 31, 2013, OneFinancial Corporation has missed 19 dividend and interest payments totaling more than $2.8 million in money owed to federal taxpayers as a result of the bank holding TARP funds," the report said.
Rickenbach faces a possible sentence of up to five years imprisonment, a maximum of $250,000 fine, and/or no more than three years of supervised release for the conspiracy charge. The maximum sentence for the money laundering conspiracy charge is no more than 20 years imprisonment, no more than $500,000 fine, and/or no more than five years of supervised release.