Gilbert G. Lundstrom, Bank Fraud, Nebraska 2016
Former Bank CEO Sentenced to 11 Years in Prison for Hiding $100 Million in Losses
A former bank CEO in Nebraska was sentenced to 11 years in prison for his role in a scheme to hide over $100 million in losses from shareholders and regulators. Gilbert G. Lundstrom, 74, of Lincoln, Nebraska, was sentenced by U.S. District Judge John M. Gerrard of the District of Nebraska on November 6, 2015 for his crimes.
Lundstrom was convicted of 12 counts, including conspiracy to commit wire fraud and securities fraud, conspiracy to falsify bank entries, wire fraud, securities fraud, and falsifying bank entries. He was also ordered to pay a $1.2 million fine and will have to pay restitution, which has not yet been determined.
The scheme, which took place at TierOne Bank, a $3 billion publicly-traded commercial bank, involved Lundstrom and his co-conspirators concealing losses on loans and declining real estate. They provided inflated figures in reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision, and misrepresented the state of the bank's capital during its annual shareholder meeting.
Assistant Attorney General Leslie R. Caldwell stated that Lundstrom's crimes contributed to the collapse of a major regional bank during the financial crisis, destroying the jobs of hundreds of bank employees and leading to massive losses for the bank's shareholders.
Lundstrom applied for $86 million in TARP funds on behalf of the bank, which was a critically important conviction, said Special Inspector General Christy Goldsmith Romero. The FBI will continue to investigate and bring to justice those who exploit their influence or position for personal gain, said Special Agent in Charge Randall C. Thysse.
The sentence shows the Justice Department's commitment to prosecuting individuals who abuse their corporate positions to commit fraud, said Caldwell. Lundstrom's actions drove a respected regional bank into the ground, and he has now been held accountable for his crimes.
TierOne Bank's aggressive and risky growth plan backfired when the housing bubble burst, said Romero. Lundstrom concealed the bank's true financial picture and dug the bank into an even deeper financial hole.
Key Facts
- State: Nebraska
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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