Marking the first ever prosecution of alleged fraud against the Trouble Asset Relief Program, Charles Antonucci, the former president of the Park Avenue Bank was arrested this morning and charged with embezzlement, bribery and allegedly trying to defraud the program of $11.2 million.
U.S. Attorney Preet Bharara, speaking at a press conference at his office in Lower Manhatta, warned that while this was the first ever TARP prosecution, his office had recently ramped up staffing and expected the probe to continue. “We expect [this] will not be the last.”
Federal prosecutors allege that Antonucci approved loans and lines of credit to companies that he invested in, made false statements to federal regulators to apply for TARP funds and arranged for the bank to lease properties that he personally owned at 2 Broad Street and 48 Jackson Street in Fishkill, NY.
“Antonucci allegedly put his personal greed ahead of his professional duty, deliberated and repeatedly deceived regulators and even attempted to obtain through fraud more than $11 million in taxpayer rescue funds through the Troubled Asset Relief program or TARP,” Bharara said.
Antonucci’s attorney, Charles Stillman, said he just received a copy of the charges and would not immediately comment.
As previously reported by The Real Deal, the New York State Banking Department shut down the Park Avenue Bank late Friday afternoon, one day after it shut down developer Shaya Boymelgreen’s LibertyPointe Bank. The assets and deposits of both banks were sold to Valley National Bank, a Wayne, N.J.-based lender.
The Park Avenue Bank, originally established in 1987, changed its status from a nationally chartered bank to a New York State chartered bank in 2004, after a change in management, according to the federal complaint.
Antonucci, besides being president and CEO of the bank, owned several outside firms, called Bedford Consulting Group, a Fishkill-based loan review company and Easy Wealth Group, a firm that imported promotional material, including pens and lapels.
Meanwhile, an alleged co-conspirator and account holder at the bank, whom prosecutors did not name, owned a number of Louisville, Ky.-based firms that bank employees called the Oxygen-related entities, including Oxygen Unlimited, H2H Holdings, River Falls Financial Services, SDH Realty and TSV Capital, among others. Another firm, called the U.S. Insurance Group, was related to the firm, and held accounts at the bank.
Prosecutors allege Antonucci received free flights from the Oxygen-related entities to visit his relatives in Florida, to attend the Super Bowl in Phoenix and the Masters golf tournament in Augusta, Ga. While he was accepting the plane ride, he authorized bank employees to approve the payment of more than $8 million in overdrafts by the Oxygen-related entities.
He also engaged in a series of deals for the bank to loan $6.5 million to the Oxygen-related entities and USIG, which then transferred the money directly to him. He then deposited these funds into the bank, claiming these were his personal funds to help recapitalize the bank when federal and state regulators issued a 2008 report calling the bank “deficient.”
Antonucci is also charged with defrauding a church in Coral Springs, Fla., causing pastors to wire $103,940 to the bank.