The former chief operating officer of a major Chinese-American bank in San Francisco is set for trial on Tuesday in a rare criminal prosecution connected to the government's bank bailout program.
Ebrahim Shabudin is charged with securities fraud and other crimes for allegedly concealing the losses of United Commercial Bank, which received $298.7 million from the Troubled Asset Relief Program at the height of the financial crisis in 2008.
UCB, the ninth-largest bank to fail during the crisis, catered to California's Asian community and expanded rapidly before regulators closed it. Its operations were eventually taken over by East West Bancorp Inc.
A fellow UCB executive, former senior vice president Thomas Yu, pleaded guilty last year to conspiracy to commit false bank entries. Yu is now cooperating with the government and is expected to testify against Shabudin at trial, according to court filings. The trial is scheduled for an Oakland, California federal court.
Another ex-UCB leader, former chief executive Thomas Wu, faces civil charges from securities regulators, but he was not criminally charged. Last month U.S. District Judge Jeffrey White ruled that Shabudin's attorneys could not raise questions before the jury about why the former top executive at UCB was not prosecuted as well.
Shabudin is accused of concealing information which would have showed the bank's loan collateral and assets had declined in value, delayed the downgrade of risk ratings on certain loans, and lied to auditors. He settled claims brought by the SEC without admitting wrongdoing, and agreed to pay a $175,000 civil penalty in 2013.
The criminal case in U.S. District Court, Northern District of California is United States of America vs. Ebrahim Shabudin, 11-cr-664.
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