Two officials, who were formerly employed at the United Commercial Bank in San Francisco before the institution failed, were charged with securities fraud by the grand jury, aided by a San Francisco CA criminal defense lawyer.
The two former executives pleaded not guilty to charges of fraud, despite allegations that the bank tampered with financial records and lied to auditors before accepting a $298 million taxpayer bailout. They are the first senior executives of a bank that received a federal bailout to be charged with criminal conduct for trying to defraud both the American tax payers and the Government.
The money they received from the Troubled Asset Relief Program (TARP) was lost when the bank was taken over by regulators. It then declared bankruptcy the following year (2009).
Ebrahim Shabudin (63) was the executive vice president and Thomas Yu (48) was senior vice president. He had also been in charge of the bank’s portfolio management and credit risk from 2008 to 2009. The two men, along with Thomas Wu (CEO of the bank) were sued by the Securities and Exchange Commission. They were charged with participating in a fraudulent scheme to hide the true financial condition of the bank from the investors, regulators, depositors, independent auditor and the Department of Treasury.
What is Securities Fraud?
Securities fraud encompasses a wide range of activities which involve deceiving investors or manipulating the markets financially. Some of these are:
Ponzi schemes, high yield investment fraud, foreign currency fraud, pyramid schemes, broker embezzlement, hedge fund related fraud, late day trading and advanced fee schemes.
Both the Securities Act of 1933 and the Securities Exchange Act of 1934 authorize the Securities and Exchange Commission to monitor the financial industry and to ensure regulatory control. Whoever knowingly destroys, alters, conceals or falsifies documents or records, intending to obstruct or influence administration or the investigation conducted by any Government department or agency, will face either a maximum prison sentence of 10 years, a fine or in some cases, both.
For a free consultation with one of the best Bay Area white collar crime lawyers, contact Mr. Morales.