While unlikely to surprise too many people, the chairman of the ironically-named "MainStreet Bank" [4] used over one-third of the TARP-supplied funds his bank received to buy himself a luxury home. Darryl Woods plead guilty to using $381,000 of the TARP funds to buy waterfront Florida property "at a time when many Americans were losing their homes," the US District Attorney exclaimed. Disgustingly, Mr Woods had previously written to TARP regulators describing Mainstreet as a small community bank and saying the funds "will provide vitally needed infusions to a bleeding patient." As The BBC reports [5], his wrongdoing was uncovered when regulators began examining how the money was used - which has so far uncovered 140 cases of misused funds...
Via The BBC, [5]
A US bank chairman has pleaded guilty to using bailout money given to rescue his firm to buy himself a luxury home.
Darryl Woods used $381,000 (£245,000) of the $1m given to his Mainstreet Bank to buy the Florida waterfront property.
...
US district attorney Tammy Dickinson said: "At a time when many Americans were losing their homes, he was siphoning off public funds."
Bailout money was given to Mainstreet under the Troubled Asset Relief Program (TARP) established after the US financial crash.
Mr Woods had previously written to TARP regulators describing Mainstreet as a small community bank and saying the funds "will provide vitally needed infusions to a bleeding patient".
...
To date, some 140 criminal cases have been filed against individuals alleged to have misused funds.
Fortune has some more color... [6]
TARP recipients were required to disclose how the bailout funds were used, but it seems that Woods apparently left out the part about his waterfront hideaway. Probably because it was an illegal misuse of funds. Not surprisingly, he misled federal investigators about the situation when later questioned (until copping to everything today).
He faces up to one year in prison without parole, plus a fine of up to $100,000 and an order of restitution. He also is banned from the financial services business for life.