Federal prosecutors recently announced the first criminal prosecution for fraud under the Troubled Asset Relief Program (“TARP”). Charles Antonucci, the former president of the Park Avenue Bank of New York, was arrested and will be prosecuted in the Southern District of New York on charges of embezzlement, bribery and allegedly trying to defraud the TARP program of $11.2 million.
The criminal charges against Mr. Antonucci come as The Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) is ratcheting up its efforts to stringently regulate TARP recipients and hold strictly accountable those who misuse taxpayer money. At a press conference on the Antonucci prosecution, SIGTARP Neil M. Barofsky, announced that his office had recently ramped up staffing and warned that the Antonucci charges “should send a powerful message to those who have tried to steal from the TARP, those who have stolen from the TARP and those who are contemplating similar fraudulent action.”
The federal government has given many indications that it intends to aggressively pursue misuse of TARP funds. The Office of the SIGTARP (pdf) also recently declared that “SIGTARP and its partners, whether state or federal, will work tirelessly to ensure that those who seek to take unfair advantage of the TARP will be held accountable for their actions” and that its goal is to become “the most sophisticated white collar criminal investigative body on the planet.” The SIGTARP, which now has 100 employees and has announced that he is actively hiring (pdf) with a goal of having 160 full-time employees, has opened 86 criminal and civil investigations, 77 of which are ongoing in cooperation with other federal agencies, including the FTC, FBI, HUD, OIG, SEC Enforcement Division, FDIC, and DOJ. Obviously, no one knows for sure where and when the next prosecution will be brought, but what is certain is that while the Antonucci case is the first, it will not be the only case filed regarding the TARP program.