(CN) - The former CFO of United Commercial Bank admitted he conspired to lie to an accountant after the bank accepted $297 million in TARP bailout funds, federal prosecutors said.
Craig S. On, 62, pleaded guilty Tuesday to conspiracy to make a materially false and misleading statement to an accountant.
On admitted he did not inform his bank's auditors about approximately $67 million in potential losses from the sale of loans the bank held, though he knew he was required to do so, San Francisco's U.S. Attorney Melinda Haag said.
On was the bank's chief financial officer from October 2008 through November 2009.
On faces a maximum penalty of 5 years in prison, a fine of $250,000, plus restitution.
United Commercial Bank, based in San Francisco, had branches throughout the United States, in China and Taiwan. Until 2009, its holding company, UCBH Holdings, was publicly traded on NASDAQ.
The Troubled Asset Relief Program provided approximately $297 million in federal funds to UCB on Nov. 14, 2008, during the financial crisis. The Federal Deposit Insurance Corp. took control of UCB less than a year later, on Nov. 6, 2009.
On was accused of conspiring to deceive auditors by manipulating the bank's books and records, misrepresenting and concealing the bank's true financial condition and causing it to issue materially false and misleading financial statements.
The conspiracy aimed to mislead auditors and conceal the "number and financial magnitude" of bad loans and conceal the bank's "true losses," Haag said .
When it failed in November 2009, UCB was the 120th U.S. bank failure of the year. It was acquired by East West Bank of Pasadena.
United Commercial Bank senior vice president Thomas Yu pleaded guilty in October to federal conspiracy and faces up to 5 years in prison.
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