The former president of the Park Avenue Bank, Charles Antonucci,
has been arrested on charges of self-dealing, bank bribery,
embezzlement, and fraud on the New York State Banking Department, Federal Deposit Insurance Corporation,
and the Troubled Assets Relief Program. The office of the United States attorney for the Southern District will be
announcing the charges at a press conference at 1 p.m. On Friday,
federal and state regulators shut down the Park Avenue Bank and
sold its deposits to Valley National Bank. TRD [more]

Smithtown Bancorp, one of the largest independent banks in the New York
area with $2.7 billion in assets, is facing a class action suit by
shareholders for allegedly hiding information about risky construction
and real estate loans that eventually led to intervention by federal
and state bank regulators. The bank was forced at the end of January to sign agreements, called
consent orders, with the Federal Deposit Insurance Corp. and the New
York State Banking Department, to reduce the amount of commercial loans
and improve its loan underwriting policies or face further regulatory
action, including potential seizure of its assets. The complaint, filed in U.S. District Court for the Eastern District of
New York, alleges that the bank provided false and misleading
information about the performance of its lending business and real
estate assets, causing company stock to soar on the NASDAQ markets. The
complaint referenced press releases and other statements where the bank
claimed to be outperforming rival banks during the real estate boom and
even after the capital markets collapsed in September 2008. “Defendants’ false and misleading statements had the intended effect
and caused SBI common stock to trade at artificially high levels
throughout the class period, trading as high as $24.50 per share on
Sept. 29, 2008,” the plaintiffs alleged. By Feb. 2, 2010, the bank’s stock price fell as low as $4.16 a share. [more]

Dozens of real estate professionals have been charged with obtaining upwards of $64 million in loans on over 100 residential New York State properties through wire fraud, bank fraud and conspiracy. In an investigation titled Operation Bad Deeds, the Federal Bureau of Investigation, the Secret Service and the New York State Banking Department exposed eight elaborate schemes involving falsified mortgage applications, foreclosure rescue scams and loan flipping. The defendants allegedly made hundreds of thousands of dollars in commissions based on fraudulent loans, and many of their victims were homeowners facing foreclosure, duped into thinking the scams could offer them a way out. In total, 41 mortgage brokers, lawyers and loan officers have been charged, though five of them are still at large, prosecutors said.
  [more]