Government officials charged Poppi Metaxas, former president and CEO of Gateway Bank, in Oakland, Calif., with bank fraud, bank fraud conspiracy and perjury.
Christy Romero, Special Inspector General for the Troubled Asset Relief Program, Loretta Lynch, U.S. attorney for the Eastern District of New York, George Venizelos, assistant director-in-charge of the Federal Bureau of Investigation, New York Field Office and David Montoya, inspector general of the Department of Housing and Urban Development, Office of Inspector General announced that an indictment was unsealed Wednesday.
In 2009, SIGTARP said that Metaxas fraudulently caused Gateway to execute a sham “round trip” transaction in which the bank self-funded a down payment to make it appear that Gateway had sold toxic, non-performing mortgage loans.
According to the indictment, in February and March 2009, Metaxas allegedly engaged in a scheme to defraud Gateway in connection with Gateway’s sale of non-performing mortgage loans to three entities in exchange for $15 million.
“Metaxas allegedly orchestrated a fraudulent scheme to give the appearance that the bank was shoring up its finances by selling problem loans to outside investors,” Romero said.
“Metaxas purportedly hid from the bank’s board and regulator the fact that she, with the help of others, made a sham loan to those investors to fund in secret the 25% ‘down payment’ of $3.64 million, a loan that was later written off. Crimes related to TARP will be investigated and prosecuted by SIGTARP and our law enforcement partners,” Romero added.