MANHATTAN (CN) - Federal prosecutors charged a trio of businessmen with bank bribery conspiracy, bank and insurance fraud, and stealing $2.3 million from a publicly traded company.
"Nearly two years ago, we secured the first conviction against a defendant, Park Avenue Bank president and CEO, Charles Antonucci, for attempting to steal $11 million from the taxpayer-funded TARP," U.S. Attorney Preet Bharara said in a statement. "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. 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."
Huff, 51, of Caneyville and Louisville, Ky., allegedly participated in a variety of fraudulent schemes involving over $100 million, according to the unsealed indictment.
Prosecutors say that Huff's schemes relied on a corrupt relationship with Park Avenue Bank and its executives: CEO Charles Antonucci Sr. and senior vice president Matthew Morris.
Allen Reichman, an investment bank executive, also was involved in one of the schemes, according to the indictment.
Huff allegedly used one company, O2HR, to steal money from client companies that was supposed to go toward their payroll, tax and insurance obligations.
The stolen funds actually bought designer clothing, jewelry, luxury cars and other personal items for Huff and his family, according to the indictment.
"From 2007 to 2009, Huff bribed Morris and Antonucci in their capacities as senior officials of Park Avenue Bank so that they would provide him and his businesses with illegal favors in return," prosecutors said in a statement.
Huff also helped Park Avenue Bank wrongfully obtain $11 million in TARP funds by funneling money and making it look like Huff had infused the bank with a fictitious $6.5 investment, according to the indictment.
Reichman allegedly participated in a scheme that left an Oklahoma-based insurance company in receivership.
Antonucci had wanted to buy the assets of Providence P&C, an Oklahoma insurance company that O2HR owed $5 million.
"Huff, Morris, Antonucci and Reichman made, and conspired to make, a number of material misstatements and material omissions concerning the true nature of the financing for Antonucci's purchase of Providence P&C," prosecutors said in a statement. "Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank - not the investment firm - was funding the purchase of Providence P&C."
After pushing the sale through, "Huff, Morris, and Antonucci took millions of dollars of the company's assets for themselves," prosecutors say. "Among other things, Morris and Antonucci each received $500,000; Morris received another $170,000 for serving as an executive at the company; and Huff took $4 million, which he used to continue the scheme to defraud O2HR's clients. Reichman received hundreds of thousands of dollars in commissions as a result of the investment firm's loan - a loan that Reichman had been repeatedly warned not to extend because it was illegal. Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris, and Antonucci had pilfered its remaining assets."
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