Real estate developer Dwight Etheridge was sentenced to 50 months in federal prison and five years of supervised release for his role in a fraud scheme that contributed to the collapse of the Bank of the Commonwealth, according to the Office of the Special Investigator for Troubled Asset Relief Program.

The 49-year-old president of Tivest Development & Construction, LLC, of Chesapeake, Va., was convicted of conspiracy to commit bank fraud, bank fraud, false statements to a financial institution, and aiding and abetting misapplication of bank funds.

The Bank of the Commonwealth, a TARP applicant, provided millions of dollars in loans to Tivest in an “extend and pretend” scheme. “Extend and pretend” refers to banks giving borrowers extra time to repay loans.

“The bank officials ‘extended’ to Etheridge what appeared on the bank’s books as new loans and construction funds, but in reality, the funds were used by bank officials to pay off Etheridge’s past-due balance,” said Christy Romero, special inspector general for TARP. “The officials simply ‘pretended’ that Etheridge had paid the loans current with his own funds.”

In one example, Tivest received a $4.1 million loan from the bank to purchase and renovate a construction project. During the project, Etheridge provided fraudulent construction draws that went without inspection to the bank.

With the construction loan, Etheridge made payments to other loans at the Bank of the Commonwealth, supported his staffing company, and made political donations and charitable contributions.

In exchange, Etheridge was allowed to accumulate overdrafts and was given thousands of dollars to work on bank-owned property.

The Bank of the Commonwealth attempted to get taxpayer assistance through TARP, but could no longer fund Etheridge after 2010, which led to the collapse of Tivest, his default on millions of dollars of loans, and his declaration of personal bankruptcy.

The Federal Deposit Insurance Corporation suffered $333 million in losses due to the bank’s failure.

Ethan Barton is a National Journalism Center intern assigned to the Washington Examiner Watchdog investigative reporting team.