Former Park Avenue Bank President Charles Antonucci has been sentenced to two and a half years in prison for his role in a scheme to defraud the Troubled Asset Relief Program (TARP). Antonucci will also pay $54.6 million in restitution and forfeit $11.2 million.
Antonucci plead guilty in 2010 to defrauding the TARP program after an investigation into the 2010 bankruptcy of Park Avenue Bank revealed that he had fraudulently applied for TARP funds by presenting a circular loan within the bank as an investment in the bank. Antonucci falsely claimed he was investing $6.5 million into the bank when, in reality, the funds were coming from the bank itself. That fake investment was then used to present the bank as being in better financial condition than it really was in an application for TARP funds.
Park Avenue Bank never actually received TARP funds. The charges were based on an investigation of the bank and Antonucci after Park Avenue Bank was taken over by the FDIC and put into receivership.
But what about those that did actually receive and misuse TARP funds? One name that comes to mind is former Chairman and CEO of Merrill Lynch John Thain.
Thain made headlines when it was revealed that in the middle of the crisis in 2008 he spent over a million dollars redecorating his office. But Thain’s superfluous office needs were nothing compared to his lust for cash.
When Merrill Lynch was collapsing in 2008 Thain initially demanded a $10 million bonus. After it was pointed out by then-New York Attorney General Andrew Cuomo that Merrill Lynch was posting a loss of $11 billion that year, Thain dropped the bonus demand.
But Thain did ultimately rush through $4 billion in executive bonuses before Merrill Lynch went under. Where did the money come from for the eleventh hour bonuses? TARP funds. And what was Thain’s punishment? Nothing. In fact, he came back to Wall Street in 2010 to become CEO of CIT Group which later paid him a $8.5 million bonus.
If Charles Antonucci deserves to be punished for his conduct regarding TARP funds — and he does — what does John Thain deserve?