Federal prosecutors alleged that Wilbur Anthony Huff, a Kentucky businessman, engaged in a variety of financial frauds, including bribing executives at Park Avenue Bank, and engaging in financial maneuvers to make it appear the lender was on solid financial footing, so it could qualify for $11 million in TARP funds, as well as defrauding Oklahoma state insurance regulators in a separate matter. He was charged with tax evasion, conspiracy and fraud charges in 13-count indictment filed in Manhattan Monday.
Matthew L. Morris, Park Avenue Bank’s former senior vice president, and Allen Reichman, a former investment banker at Oppenheimer & Co., were also charged criminally in the indictment unsealed Monday.
The charges come nearly two years after Charles J. Antonucci Sr., the former chief executive of Park Avenue Bank, pleaded guilty to six criminal counts, including attempting to defraud TARP, the government’s plan to save struggling banks and financial institutions during the U.S. financial crisis in 2008. Mr. Antonucci, who is awaiting sentencing, was the first person ever charged with attempting to defraud TARP.
Lawyers for Messrs. Huff and Mr. Antonucci declined comment Monday. Lawyers for Messrs. Morris and Reichman didn’t immediately return phone calls seeking comment.
“Today’s indictment charging two of Antonucci’s alleged co-conspirators represents ‘Part Two’ in our ongoing investigation into the misconduct at the bank that ultimately led to its collapse,” said Preet Bharara, the U.S. attorney in Manhattan. “As alleged, Wilbur Anthony Huff was a vortex of fraud who also evaded over $50 million in taxes owed to the IRS and, along with Matthew Morris and Allen Reichman, plundered the assets of an insurance company, leading to its business failure. We will not tolerate fraud or those who steal from taxpayers for their own personal gain.”
Park Avenue Bank, which had more than $500 million in assets and specialized in commercial real-estate loans, failed in March 2010. The bank had more than $27 million in net losses in 2009.
Prosecutors alleged that Mr. Huff diverted millions of dollars of client money for his own use from O2HR, a Tampa firm that managed payroll, taxes and workers compensation obligations for its clients.
He allegedly paid at least $400,000 in bribes between 2007 and 2010 to Mr. Antonucci and Mr. Morris, the former Park Avenue Bank executives, in exchange for favors, prosecutors said.
Mr. Huff also allegedly helped Mr. Morris and Mr. Antonucci defraud bank regulators by making it appear as if Mr. Antonucci had injected $6.5 million into the bank when those funds had actually been funneled through accounts controlled by Huff, prosecutors said. This allowed the bank to engage in certain banking transactions and to be better positioned to apply for $11 million in TARP funds, prosecutors said.
The bank didn’t receive TARP funds.
At the same time, Mr. Huff, Mr. Morris, Mr. Antonucci and Mr. Reichman allegedly engaged in a conspiracy that defrauded Oklahoma insurance regulators through Mr. Antonucci’s purchase of Providence P&C, an Oklahoma insurance company that owed $5 million to Mr. Huff’s O2HR, prosecutors said.
Oklahoma regulators filed a lawsuit over the transaction shortly after Mr. Antonucci’s guilty plea in October 2010.