{"id":15182,"date":"2015-09-01T22:01:54","date_gmt":"2015-09-02T05:01:54","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=15182"},"modified":"2015-09-02T12:57:12","modified_gmt":"2015-09-02T19:57:12","slug":"former-ceo-involved-in-one-of-the-largest-bank-fraud-schemes-sentenced-to-prison","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=15182","title":{"rendered":"Former CEO Involved in One of the Largest Bank Fraud Schemes Sentenced to Prison"},"content":{"rendered":"

CALIFORNIA<\/strong><\/p>\n

\n

\"FDIC\"<\/a>The former chief operating officer and chief credit officer of the United Commercial Bank<\/strong> was sentenced Tuesday to more than eight years for securities fraud that caused the failure of the ninth largest bank in the nation, according to officials.<\/p>\n

The estimated losses of this bank failure was more than $677 million, according to officials.<\/p>\n

Ebrahim Shabudin<\/strong>, 66, of Moraga, California, also was convicted of other corporate fraud involving United Commercial Bank or UCB, officials said.<\/p>\n

U.S. District Judge Jeffrey S. White<\/strong> also ordered restitution in the amount of $348,000. \u00a0The judge also allowed Shabudin to begin his sentence.<\/p>\n

The sentencing brings to a close one of the most significant prosecutions to arise out of the 2008 financial crisis, authorities said.<\/p>\n

\u201cAs the Chief Operating Officer and Chief Credit Officer of United Commercial Bank, Ebrahim Shabudin presided over one of the largest securities fraud schemes in the history of this district,\u201d said U.S. Attorney Melina Haag.<\/strong>\u00a0 \u201cHis prison term should serve as a warning to persons who believe that complex commercial crime will not be detected and prosecuted.\u00a0 I am proud of all the hard work of the attorneys and staff of this office and of our federal partners that resulted in this successful prosecution.\u201d<\/p>\n

Shabudin was the Chief Operating Officer and Chief Credit Officer at UCB in 2008 and 2009.<\/p>\n

Shabudin was the second most senior officer in executive management at UCB after former Chief Executive Officer Thomas Shiu-Kit \u201cTommy\u201d Wu.<\/strong><\/p>\n

On Nov. 6, 2009, UCB was taken over by the FDIC.<\/p>\n

\"FBI<\/a>With over $10.9 billion in assets, UCB\u2019s failure was the ninth largest failure since 2007 of a bank insured by the FDIC\u2019s Deposit Insurance Fund, according to the FDIC.<\/p>\n

In 2013, FDIC estimated that total losses for UCB would exceed $1.1 billion.<\/p>\n

Through 2014, however, with the recovery of the United States economy, FDIC now estimates the loss to the Deposit Insurance Fund to be approximately $677 million.<\/p>\n

On Nov. 14, 2008, the Troubled Asset Relief Program<\/strong>\u00a0 or TARP provided approximately $298 million in federal funds to UCB during the financial crisis.<\/p>\n

Shabudin was charged with conspiring with others within the bank to falsify key bank records as part of a scheme to conceal millions of dollars in losses and falsely inflate the bank\u2019s financial statements.<\/p>\n

\"FBI\"<\/a>Among the records Shabudin was charged with falsifying were those filed with the United States Securities and Exchange Commission \u00a0and FDIC related to the third and fourth quarters of 2008 describing UCB\u2019s so-called Allowance for Loan Losses, according to authorities.<\/p>\n

Also falsified were documents relating to UCB\u2019s quarterly and year-end earnings per share as announced by the bank to the investing public, officials said.<\/p>\n

On March 25, 2015, following a six-week trial, a jury found Shabudin guilty of seven crimes related to the scheme:<\/p>\n