Former Bank Exec Pleads Guilty in $Million Scheme

A former senior vice president and chief credit officer of TierOne Bank, Don A. Langford, has pleaded guilty to his role in a scheme to defraud the bank’s shareholders and regulators.

The scheme, which involved inflating the value of TierOne’s loan and real estate portfolio, was uncovered by the FBI’s Omaha Division and the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Langford, 63, of Gibsonia, Pennsylvania, and others used outdated appraisals on properties, rejected new appraisals that would have adversely impacted TierOne’s reportable assets, and delayed seeking new appraisals to conceal the current value of collateral and restructure loan terms.

As a result, Langford and others were able to hide millions of dollars in losses from regulators and investors. TierOne submitted an application to the Office of Thrift Supervision (OTS) seeking Troubled Asset Relief Program (TARP) funding in 2008, but ultimately withdrew its application and did not receive TARP funds.

TierOne filed for bankruptcy shortly after the bank was shut down by OTS in June 2010. Langford pleaded guilty to conspiring to commit securities fraud, wire fraud, and making false entries in a bank’s books and records, as well as one count of making false statements.

Sentencing is scheduled for December 5, 2014. The case was investigated by the FBI’s Omaha Division and by SIGTARP, with the assistance of the Securities and Exchange Commission (SEC). The case is being prosecuted by Trial Attorneys Henr.

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