Bank CEO Admits to Using TARP Money to Buy Luxury Condo in Florida

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Bank Chairman Reportedly Used Bailout Funds For Luxury Condo
Darryl Layne Woods, the former CEO of a Missouri bank, admitted in court Monday to using financial crisis bailout funds to purchase a luxury waterfront condo in Florida, Dealbook's Peter Lattman reports.

The purpose of TARP is to promote financial stability ... in a time of national economic crisis, not to bankroll ... luxury vacation properties for bank executives."

In November 2008, Woods, 48, who was the head of Mainstreet Bank and the bank's holding company Calvert Financial Corporation, applied for TARP money on behalf of his bank, a press release states.

In January 2009, his bank received $1,037,000. A month later, he used $381,487 of it to buy a place in Fort Myers, Florida.

He pleaded guilty to misleading federal investigators about how he used the TARP money.

Woods is no longer allowed to work in the banking industry, according to the release. He also faces a sentence of up to one year in federal prison without parole and a fine of up to $100,000 plus restitution.

Here's the full press release:

JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., bank chairman pleaded guilty in federal court today to misleading federal investigators about his use of $381,000 in bank bailout funds to purchase a luxury condominium in Fort Myers, Fla.

"At a time when many other Americans were losing their homes, he was siphoning off public funds to buy a luxury vacation condo in Florida," Dickinson said. "These federal funds were intended to help stabilize the economy during a fiscal crisis. Instead, this disgraced business leader took advantage of the situation to benefit himself and other bank executives, then lied to federal investigators in an attempt to hide his scheme."

Darryl Layne Woods, 48, of Columbia, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to a federal information that charges him with making a false writing.

Woods was the chairman and chief financial officer of Mainstreet Bank in Ashland, Mo. He was also the chairman, president and majority shareholder of Calvert Financial Corporation, the bank holding company for Mainstreet Bank.

"The purpose of TARP is to promote financial stability and lending in a time of national economic crisis, not to bankroll the purchase of luxury vacation properties for bank executives," said Christy Romero, Special Inspector General for TARP (SIGTARP). "When SIGTARP required Mainstreet Bank to disclose how it spent TARP funds, bank Chairman and CFO Woods failed to tell the truth that within days of receiving the TARP funds, the bank spent more than a third of the funds purchasing a waterfront condo in Florida for his and other executives' use.

SIGTARP and our law enforcement partners will hold accountable and bring to justice those guilty of crimes related to TARP."

In November 2008, Calvert Financial applied to receive funds through the Troubled Asset Relief Program (TARP). TARP was created through the Emergency Economic Stabilization Act of 2008. The purpose of TARP was to provide capital to financial institutions to enable them to build their capital base and to increase the flow of financing to businesses and individuals. The U.S. Department of Treasury approved the request for TARP funds, and in January 2009 Calvert Financial received $1,037,000 through the TARP Capital Purchase Program.

Woods admitted today that he used $381,487 of the TARP funds to purchase the luxury condominium on Feb. 2, 2009.

The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) was required to supervise, audit and investigate institutions that received TARP funds. SIGTARP sent letters to various financial institutions seeking specific information as to how TARP funds were used by the institutions. Woods responded to that inquiry in a letter dated Feb. 10, 2009.

Woods failed to disclose in his letter that a significant portion of TARP funds had been used to acquire the condominium. Failure to disclose the purchase of the condominium was a material misrepresentation of facts relating to the true use of TARP funds.

Under the terms of today's plea agreement, Woods is required to desist from any further involvement in banking and may not serve as an officer, director, employee or affiliated party of any financial institution or agency. The government agrees not to bring any charges against his wife, Jackie Woods (Ralston), for any criminal offenses arising from the facts known by the government as a result of this investigation.

Under federal statutes, Woods is subject to a sentence of up to one year in federal prison without parole, plus a fine up to $100,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Reserve

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52 Comments

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jhagan283jo

No one is surprised! In fact this behavior I expect, why wouldn't anyone?

August 29 2013 at 4:29 PM Report abuse rate up rate down Reply
betty_brock

HANG HIM

August 29 2013 at 4:13 PM Report abuse rate up rate down Reply
arenadood

This is not fraud. He usewd the money to fund a retirement plan.

August 29 2013 at 12:00 PM Report abuse rate up rate down Reply
samtron1

Did they take the house away from him?

August 29 2013 at 10:10 AM Report abuse rate up rate down Reply
IBruzEZ

No different that all those CEO's who got millions in severance pay from the bailouts. All of them need to be locked up and the money recouped. People who think they are so far above everyone else.

August 29 2013 at 9:55 AM Report abuse rate up rate down Reply
scottee

a politician would do the same.
it's the politicians AND the bankers against the people.
the bankers cannot do what they do with permission from the politicians.
and we keep re-electing them...why?
and pay them six figures with benefits for life...why????

August 29 2013 at 9:47 AM Report abuse +1 rate up rate down Reply
biffcove

I'll bet if the penalty for fraud and lying to get these funds was stronger and did get enforced this would slow down! 10 years in jail plus fines. LOCK THEIR A___S UP!!!!

August 29 2013 at 9:37 AM Report abuse +3 rate up rate down Reply
brennemanbelkin

Your run-of-the-mill bank robber will do ten years for stealing 3 hundred grand.
Lock him up. Lock them all up.

August 29 2013 at 9:36 AM Report abuse +3 rate up rate down Reply
Nmonuma

Outrageous. At the time people were losing their home, getting laid off, crying for a little help while this fool was buying a waterfront condo in sunny Florida. Uh!! Throw him in jail with the wolves, swallow the key and let him see what it feels to be desperate, to work until your feet bleed...Smh.

August 29 2013 at 9:35 AM Report abuse +2 rate up rate down Reply
gohuskr2

I have no clue what this joker really did but he was obviously drunk on his own power trip. I was in banking over 23 yrs successfully. The govt's involvement was mind numbing and is why I bailed. Ask any larger bank's exec's about pressure the Obama admin put of them to take TARP funds even when didn't need. That's right to take it - Big O didn't want to look stupid. My bank's would never take funds from TARP - nothing is for free and the Feds already control bank's. Like taking money from Mafia. This is a story that just gives Feds ammunition to crank regulations up more. Let the poorly run banks fail and good banks thrive. TARP was a failure from the get go. Add that to crooked bankers and we wonder why this story happens?

August 29 2013 at 9:35 AM Report abuse -1 rate up rate down Reply