Edward Woodard, former chief executive officer of Bank of the Commonwealth who orchestrated the largest bank failure in Virginia history, has been sentenced to 23 years in prison.
The 70-year-old, from Norfolk, Va., was the mastermind behind a bank fraud conspiracy that used fraudulent books and records to apply for $28 million in funds from the Troubled Asset Relief Program.
Woodward made risky loans that violated industry standards and bank policies he created. When the loans resulted in losses, he distorted this damage through criminal accounting tricks and lies to bank examiners.
Court evidence revealed that Woodard engaged in illegal relationships with certain distressed borrowers to hide the bank’s deteriorating financial condition.
Conspirators Thomas Arney, Eric Menden and George Hranowskyj all testified at trial that, at the request of Woodard and
In return for these actions, the three conspirators all received preferential treatment, such as affording large overdrafts, below-market interest rates, loans to make interest payments on other loans, and easy access to credit. Woodward also funded three loans that totaled $11 million without the approval of the board of directors to a borrower in bankruptcy.
Woodard made false entries in bank records throughout the conspiracy to cover-up the fact that he authorized the funding of these loans without approval.
To go along with the prison term, Woodward was also ordered by the Eastern District of Virginia to pay more than $333 million in restitution to the Federal Deposit Insurance Corp.
“Motivated by greed, Woodard lied, cheated and stole,” says Christy Romero, special inspector general for TARP. “TARP is not an opportunity to finance banks failing under the weight of fraud, but Woodard used fraudulent books and records to try to cheat federal taxpayers out of $28 million in TARP bailout funds to fill the holes he caused in the bank’s books.”
