A former loan officer at a Kansas bank, which received funds from the government as part of the Trouble Asset Relief Program, will spend the next six months in federal prison after pleading guilty to one count of bank fraud.
Christy Romero, Special Inspector General for the Troubled Asset Relief Program and Barry Grissom, United States Attorney for the District of Kansas, announced that Brian Harrison, 56, of Great Bend, Kan., a former loan officer at TARP recipient Farmers Bank and Trust, was sentenced, to six months in federal prison followed by six months home detention for bank fraud.
Harrison was also ordered to pay $124,000 in restitution and $50,000 in a personal forfeiture judgment.
According to SIGTARP, which investigated the case with assistance from the Federal Bureau of Investigation, Harrison admitted to defrauding Farmers Bank and Trust during his time as a loan officer from 2004 to 2012.
As a loan officer, Harrison’s duties included reviewing, approving, and disbursing loans. According to SIGTARP, Harrison made or caused to be made false statements to the bank to hide the poor performance of various loans he made.
SIGTARP said that Harrison’s false statements were intended to deflect questions from bank officers about problems with his loans. Harrison also falsified credit and loan applications, promissory notes, and security agreements on behalf of a purported debtor without the debtor’s proper authority.
According to previous release from SIGTARP, Romero said that Harrison engaged in an “extend-and pretend” bank fraud scheme, extending what looked on the bank’s books to be new loans for new purposes to new borrowers, when Harrison knew that the loan proceeds would be used to make other delinquent loans from other borrowers look current.
To further his bank fraud scheme, Harrison also filed false documents needed for the bank to issue the new loans.
In June 2009, Farmers Enterprises, of Great Bend, Kan., the parent company of Farmers Bank and Trust, received $12 million in federal taxpayer funds through the U.S. Department of the Treasury Troubled Asset Relief Program. In November 2012, the bank exited TARP by purchasing the Treasury Department’s stake in the company at a discount, resulting in a loss of $560,748 on the TARP investment, SIGTARP said in a release.
“Senior TARP bank officer Brian Harrison was sentenced to federal prison for defrauding his employer, TARP recipient Farmers Bank, by fraudulently concealing loans that he had made leading up to and during the financial crisis that later became delinquent,” Romero said.
“Harrison had the opportunity to play it straight, comply with the law, and tell the truth about losses on the loans, but instead, he resorted to fraud and outright lies,” Romero continued. “Vigorous criminal law enforcement by SIGTARP and our partners leaves the banking industry safer than we found it by enforcing change through justice for crime related to TARP. However, there must be a cultural change within institutions that emphasizes honesty, integrity, and adherence to the law, to restore public trust and confidence in the financial industry.”
[“source – housingwire.com”]