Plans to have flailing financial institutions certify how they use bailout funds may leave the companies open to large fines under the False Claims Act, say legal experts. On January 22, Neil Barofsky, the U.S. Treasury's Special Inspector General for the $700 billion Troubled Asset Recovery Program (TARP), said that his office would begin requesting bailout recipients to certify their use of the funds and their compliance with executive compensation restrictions. Under the plan, the Treasury Department will request that financial institutions submit narratives on the expected use of TARP funds with supporting documentation, a description of the financial institution's...
U.S. investigators arrested the former chief executive officer of a Manhattan-based bank Monday for allegedly embezzling money from a fraudulent loan and attempting to cheat the government out of federal bailout funds.
Financial institutions should practice special due diligence in dealing with funds distributed under the Troubled Asset Relief Program because they may be used to launder money and perpetrate fraud, according to a Financial Crimes Enforcement Network advisory issued Wednesday.
A government watchdog's call for stronger anti-money laundering controls on a federal bank bailout program could result in a "significant step up" in compliance duties for companies involved, say consultants.