BRIAN ROSS, JUSTIN ROOD, and JOSEPH RHEE
ABC News
January 18, 2009
A brewing fraud scandal at the Treasury Department may be worse than officials originally thought.
- A d v e r t i s e m e n t
Investigators probing how Treasury regulators allowed a bank to falsify financial records hiding its ill health have found at least three other instances of similar apparent fraud, sources tell ABC News.
In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules — even if it disguised the bank’s health to the public.
Treasury Department Inspector General Eric Thorson announced in November his office would probe how a Savings and Loan overseer allowed the IndyMac bank to essentially cook its books, making it appear in government filings that the bank had more deposits than it really did. But Thorson’s aides now say IndyMac wasn’t the only institution to get such cozy assistance from the official who should have been the cop on the beat.
The federal government took over IndyMac in July, after the bank’s stock price plummeted to just pennies a share when it was revealed the bank had financial troubles due to defaulted mortgages and subprime loans, costing taxpayers over $9 billion.
Darrel Dochow, the West Coast regional director at the Office of Thrift Supervision who allowed IndyMac to backdate its deposits, has been removed from his position but he remains on the government payroll while the Inspector General’s Office investigates the allegations against him. Investigators say Dochow, who reportedly earns $230,000 a year, allowed IndyMac to register an $18 million capital injection it received in May in a report describing the bank’s financial condition in the end of March.
"They [IndyMac] were able to maintain their well-capitalized threshold and continue to use broker deposits to make loans," said Marla Freedman, an assistant Inspector General at Treasury. "Basically, while the institution was having financial difficulty, it kept the public from knowing earlier than it otherwise should have or would have."
Loading ...
February 18th, 2009 at 11:10 am
As one of the 10,000 depositors that were given wrong advice by Indymac I lost $27000 of my life savings. We’ve written, visited, called and protested with no results. We are ordinary Americans who wanted a safe investment and trusted the bank when they promised our accounts were insured. When the bank failed the FDIC agent told me that she was so sorry that I was lied to and there were many more depositors just like me. This was no comfort. The FDIC took our money and the depositors had to pay for the banks mistakes. The FDIC says we should be happy we got half back! Wall street and the banks that took crazy risks are getting rewarded by bail outs. We just want what was stolen from us. It’s robbery and we want to know when Congress will stand up for law abiding Americans. By doing nothing you are part of the problem! Please help us get back our money.
February 18th, 2009 at 4:27 pm
Thanks for exposing the crooks. I hope the government will have sympathy on the real victims. We just want our hard-earned money back!
February 19th, 2009 at 1:56 pm
My wife and I lost a large portion of our retirement savings. We’ve worked all our lives and have been counting on the interest to fund our modest retirement. We had no reason to believe that our savings were in jeopardy since the advertisements on the internet said they were fully insured. It now surfaces that Indymac did not have adequate reserves to support the demand of the depositors, although federal regulations require them to have those reserves available in the event many depositors decided to withdraw funds at the same time. That is precisly what occured. The back dating and tacit approval of agents of the FDIC has proven disasterous to us. We both feel used and abused by those in decision making positions. We will join others to petition the courts to help.
February 19th, 2009 at 11:54 pm
Good job ABC exposing these crooks! Because that is exactly what they are. How they robbed 10,000 uninsured depositors of our life savings, our children’s education and retirement savings.
Now the FDIC is putting the bank on a silver platter for the Mr. Flowers, and the likes who are doing a ‘grave dance’ according to this article: Feb.19 (Bloomberg) J. Christopher Flowers, whose private-equity firm bought a stake in California’s failed IndyMac Bank said “low-life grave dancers like me” stand to make a ‘tremendous fortune’ from the financial crisis.
We are senior citizens who sold our home of 30 years to deposit the proceeds of the sale at Indymac Bank. We lost $96,000 and will be unable to purchase another home. At our age this a terrible loss, not only for this financial loss but worse, losing the trust in our financial institutions.
For us there is no bail out or stimulus plan. Very few, if any, have dared to expose the truth of what is happening with our financial institutions. We commend you ABC for doing just that. Keep up the good work!!!
February 21st, 2009 at 3:40 pm
Ten thousands Indymac depositors thank ABC news reporters’ hardwork in exposing government’s corruption. Your efforts make a difference for future depositors who ought to realize that our banking system is not as safe as government announced. We believe only journalist can get our money back, not government officails.