Banks were supposed to use federal funds from the Troubled Asset Relief Program, or TARP, to stabilize themselves during the financial crisis. But Darryl Layne Woods, the former chairman and chief financial officer of Mainstreet Bank in Ashland, Mo., apparently thought he had a better idea for how to use the money: He bought a luxury condominium in South Florida for his personal use and that of other executives at the bank.
If that sounds inappropriate, it is.
So much so that Woods, 48, of Columbia, Mo., has pleaded guilty to misleading federal investigators about the bank's use of $381,000 in TARP funds.
Woods also was chairman, president and majority shareholder of Calvert Financial Corp., a bank holding company that owned Mainstreet Bank. Calvert applied for TARP funds in November 2008. When the request was approved two months later, Calvert got $1.037 million through TARP. Of that amount, $381,487 was used to purchase the condo, Woods admitted.
In a statement, Christy Romero, special inspector general for TARP, said the program's purpose was to promote financial stability and lending, not bankroll the purchase of luxury vacation homes for bank executives.
"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," Romero said.
Tammy Dickinson, U.S. attorney for the Western District of Missouri, also took an unsurprisingly dim view of Woods' actions with respect to the TARP funds that Mainstreet Bank received.
"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 in the statement.
Under the terms of his plea agreement, Woods cannot have any further involvement in banking and cannot serve as an officer, director, employee or affiliated party of any financial institution or agency.
He could receive a sentence of up to one year in federal prison without parole plus a fine of up to $100,000 and order of restitution, Romero said.
Would you pull your money out of this bank because of its now-former honcho?
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