The following is an example of what is called collective embezzlement, when executives and management use the corporations they govern as vessels for their own personal enrichment:
Florida Bank, Used as ATM by Insiders, Won TARP Loan But Now Teeters
by Jake Bernstein
ProPublica
U.S. Century Bank rocketed into being in 2002, with investors pouring in $30 million over three months. Four years later, the Miami-based bank boasted assets of more than $1 billion, had consistently shown a profit, and had won plaudits from banking analysts such as BauerFinancial and glowing reviews from The Miami Herald and other local media.
In 2009, as the financial crisis hit, the bank received a vote of confidence from the federal government when it won a $50.2 million loan under the federal Trouble Assets Relief Program, or TARP -- money earmarked for healthy banks. It was the most TARP money given to a single Florida bank. "This represents an important recognition for U.S. Century Bank as it acknowledges our strength, stability and good standing as a strong and healthy financial institution," said Ramon Rasco, the bank's chairman in a press release announcing the TARP loan.
In fact, U.S. Century was ailing when it received the TARP loan. Today, U.S. Century teeters on the edge of collapse as it operates under an extraordinary consent order, issued in June by the Federal Deposit Insurance Corporation. Sweeping in scope, the consent order demands an overhaul including changes in top executives, a review of all loans, implementation of a program to guard against money laundering, and an increase in the bank's capital.
The rise and fall of U.S. Century, while certainly more extreme than most banks, exemplifies the fast-and-loose banking culture that led to the financial crisis, which continues to drag down the U.S. and world economy. It also epitomizes both the failure to regulate the banking sector during the pre-crisis boom years and the slipshod approach to the bailout that followed the bust. Above all, it's about losers and winners. The losers are taxpayers and local residents grappling with the ill effects of suburban sprawl. The winners appear to be a group of wealthy and politically connected businessmen who created a bank that served as their own corporate ATM, funneling tens of millions of dollars to ventures in which they had a stake.
"Insider loans" -- loans to directors or officers of the bank -- at their peak exceeded 94 percent of U.S. Century's total equity capital. While high levels of insider lending are not uncommon in the early years of a bank startup, at U.S. Century they continued for years. Many of these loans were for speculative real estate projects, some of which are now defunct or gravely troubled. ...
http://www.propublica.org/article/florida-bank-used-as-atm-by-insiders-won-tarp-loan-but-now-teeters