Former CEO of $3 Billion TierOne Bank Sentenced to 11 Years in Prison

[nitpicker]

Department of Justice

Office of Public Affairs

https://www.justice.gov/opa/pr/former-ceo-3-billion-tierone-bank-sentenced-11-years-prison-orchestrating-scheme-hide-more

FOR IMMEDIATE RELEASE

Wednesday, March 23, 2016

Former CEO of $3 Billion TierOne Bank Sentenced to 11 Years in Prison for Orchestrating Scheme to Hide More than $100 Million in Losses from Shareholders and Regulators


The former CEO of TierOne Bank, a $3 billion publicly-traded commercial bank formerly headquartered in Lincoln, Nebraska, was sentenced to 132 months in prison today for orchestrating a scheme to defraud TierOne’s shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate.
(snip)

Gilbert G. Lundstrom, 74, of Lincoln, was sentenced by U.S. District Judge John M. Gerrard of the District of Nebraska, who also ordered Lundstrom to pay a $1.2 million fine. The court deferred entering a restitution order until after sentencing. On Nov. 6, 2015, after a two-week jury trial, Lundstrom was convicted of 12 of 13 counts charged, including conspiracy to commit wire fraud and securities fraud, conspiracy to falsify bank entries, wire fraud, securities fraud and falsifying bank entries.
(snip)

According to the evidence presented at trial, Lundstrom designed an aggressive strategy to expand TierOne’s portfolio beyond traditional lending in Nebraska to riskier areas, including commercial real estate in Las Vegas, which decimated the bank once the financial crisis hit. Trial evidence showed that Lundstrom and his co-conspirators then intentionally concealed more than $100 million in losses in TierOne’s loan and real estate portfolio from investors and regulators and provided inflated figures in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision. In April 2009, Lundstrom and his co-conspirators learned that TierOne needed to increase its reserves and “loan loss allowance” by between $34 million and $114 million, but concealed this information from shareholders and regulators in TierOne’s financial statements, the evidence showed. In addition, trial evidence demonstrated that during TierOne’s annual shareholder meeting held on May 21, 2009, Lundstrom misrepresented the state of TierOne’s capital ratios and reserves and whether TierOne had applied for TARP funding.

In June 2010, following TierOne’s ultimate disclosure of $120 million in loan losses and its subsequent delisting from the NASDAQ exchange, TierOne was shut down by the Federal Deposit Insurance Corporation. At the time of the closure, TierOne had more than 750 employees working at its headquarters in Lincoln and its 69 branch offices located in Nebraska, Iowa and Kansas.

In 2014, co-conspirators James Laphen, 67, of Omaha, TierOne’s former president and chief operating officer, and Don Langford, 65, of College Station, Texas, TierOne’s former chief credit officer, pleaded guilty to multiple felonies in connection with their participation in the scheme. Laphen and Langford are scheduled to be sentenced tomorrow by Judge Gerrard.
(snip)

[awoke_in_2003]

1. Oh, he screwed shareholders and not regular people

that is why he is going to prison.

[valerief]

3. Bingo, and that's the ONLY reason. nt

[hibbing]

2. My neighbor worked there

Hope he didn't get totally screwed over in terms of any kind of retirement savings plan stuff. Luckily, he found another job rather quickly.

Peace

[davidthegnome]

4. Shocking.

Look at that, a sociopath acting like a sociopath.

[sueh]

5. Good! I'm glad some of these crimininals are finally going to prison. Just need more of them to go.

[MrScorpio]

6. I'm all for jailing bankers...

It's not done enough for my tastes.

[joshdawg]

7. Jail time is not enough. A fine added to that is still not enough.

ALL his money needs to be taken from him AND his family. No one associated with him should have access to ANY of the monies he has bilked from people. He needs to be made poor as a churchmouse. Then and only then will these %^**(&^ learn their lesson.

[Moostache]

10. Amen! (N/t)

[Punx]

11. Meanwhile while driving with out of state plates in Nebraska

Expect this:

http://www.democraticunderground.com/10141394922


Two different sets of rules for sure.

[CanonRay]

8. Good. One down, how many hundreds more to go... n/t

[SHRED]

9. And if you're Goldman Sachs...

...well...you know.