SAN FRANCISCO (CN) - A federal jury on Thursday convicted a former United Commercial Bank credit officer for hiding the bank's plunge into insolvency from investors and the government.
Ebrahim Shabudin, 66, was convicted of seven counts of conspiracy, securities fraud and other corporate fraud offenses stemming from the failure of United Commercial Bank, where he was chief operating officer and chief credit officer until it was taken over by the FDIC in 2009.
The bank was the ninth-largest bank failure during the economic crisis and has cost the FDIC's insurance fund about $677 million - a figure that has become less dire thanks to an improved economy, the Justice Department said.
Shabudin and other bank officers conspired to falsify key bank records in an effort to conceal millions in losses and inflate UCB's financial statements. The jury found Shabudin helped file false reports with the Securities and Exchange Commission and FDIC.
Shabudin also helped file false documents about UCB's quarterly and year-end per-share earnings that were released to the investing public, the jury found.
"UCB is one of the largest criminal prosecutions brought by the Department of Justice of wrongdoing by bank officers arising out of the 2008 financial crisis," U.S. Attorney Melinda Haag said following the verdict. "With actual losses exceeding a half a billion dollars, the prosecution of Shabudin and other senior officers at UCB is one of the most significant financial fraud cases in the history of the Northern District of California."
Shabudin's conviction marks the third for a UCB officer.
The man faces up to 145 years in prison, nearly $16.8 million in fines and 27 years' probation after release.
He will be sentenced June 30 by U.S. District Judge Jeffrey White.
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