Washington, DC—(ENEWSPF)—September 9, 2014. A former senior vice president and chief credit officer of TierOne Bank, a publicly traded commercial bank formerly headquartered in Lincoln, Nebraska, pleaded guilty today for his role in a scheme to defraud TierOne’s shareholders and regulators.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Deborah R. Gilg of the District of Nebraska, Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.
“When the real estate market crashed, Don Langford, the chief credit officer and a senior vice president of TierOne Bank, worked with others to cook the bank’s books and cover up mounting losses,” said Assistant Attorney General Caldwell. “This conviction is another example of the Criminal Division’s pursuit of corporate executives who commit fraud, no matter what their title or stature.”
“The vast investigation led by the Omaha FBI Division, in conjunction with SIGTARP, ascertained and exposed a criminal enterprise maneuvering complex fraudulent transactions,” said FBI Special Agent in Charge Metz. “This case reflects the FBI’s nonstop commitment to protect our communities by aggressively investigating and bringing to justice individuals exploiting their influence or position for personal gain.”
“Langford, former TierOne senior executive and chief credit officer, conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public,” said SIGTARP Romero. “Langford and others engaged in fraud in order to keep regulators at bay and from closing the bank, to maintain and increase the bank’s stock price, and to enrich themselves. The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008. SIGTARP and our law enforcement officers will bring to justice perpetrators of fraud related to TARP and hold them accountable for their crimes.”
According to a criminal information filed with his plea agreement, from at least 2009 to April 2010, Don A. Langford, 63, of Gibsonia, Pennsylvania, and others falsely inflated the value of TierOne’s loan and real estate portfolio in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision (OTS). In January 2009, TierOne had executed a supervisory agreement with OTS that required TierOne to report information about its performance and financial condition and to maintain a minimum capital position in relation to its loan portfolio and other assets. Langford and others intentionally used outdated appraisals on properties, and rejected new appraisals that would have adversely impacted TierOne’s reportable assets, revenue and earnings. In addition, Langford and others delayed seeking new appraisals to conceal the current value of collateral and restructured loan terms to disguise the borrower’s inability to make timely interest and principal payments. As a result, Langford and others were able to hide millions of dollars in losses from regulators and investors.
In 2008, TierOne submitted an application to the OTS seeking Troubled Asset Relief Program (TARP) funding. Ultimately, TierOne withdrew its application and did not receive TARP funds. TierOne filed for bankruptcy shortly after the bank was shut down by OTS in June 2010.
Langford pleaded guilty before U.S. Magistrate Judge Cheryl R. Zwart of the District of Nebraska to conspiring to commit securities fraud, wire fraud and making false entries in a bank’s books and records, as well as one count of making false statements. Sentencing is scheduled for Dec. 5, 2014.
The case was investigated by the FBI’s Omaha Division and by SIGTARP. The department recognizes the substantial assistance of the SEC.
The case is being prosecuted by Trial Attorneys Henry P. Van Dyck and L. Rush Atkinson and Senior Litigation Counsel David A. Bybee of the Criminal Division’s Fraud Section.
Source: justice.gov
