Edward Woodard, former CEO of the Virginia Bank of the Commonwealth, was sentenced to 23 years in federal prison for masterminding a massive fraud scheme that led to the bank's failure.
That failure also cost the Federal Deposit Insurance Corporation $333 million, according to a report by Christy Romero, Special Inspector General for the Troubled Asset Relief Program.
“This is the largest bank failure in Virginia history," Romero said in announcing Woodward's sentence. "When the loans resulted in losses, he hid the losses through criminal accounting tricks and lies to bank examiners. He stole, lining his own pockets at the expense of the bank."
Woodward is required to repay the $333 million.
The former CEO fabricated bank records and lied to bank examiners for his personal gain and to cheat $28 million in TARP funds from taxpayers in order to fill the gaps in the books his actions caused.
At his request, Woodard’s conspirators performed favors such as bailing out the defendant’s son from bad investments.
Woodard also masked the bank’s declining financial condition by forming relationships with troubled borrowers, such as former president of Tivest Development & Construction, LLC, Dwight Etheridge.
“Woodard also caused the bank to pay approximately $100,000 for renovations to his son’s personal residence, thousands of dollars in fraudulent commissions owed and his son’s personal legal fees," according to Romero.
In exchange for his conspirators' help, Woodard gave them favors, such as below-market interest rates, and allowed hundreds of thousands of dollars in overdrafts.
Woodard, 70, a Norfolk, Va., resident, was convicted of conspiracy to commit bank fraud, false entry in a bank record, unlawful participation in loans, false statements to a financial institution, misapplication of bank funds and bank fraud.
Etheridge was sentenced to 50 months in federal prison last month for his contribution to the fraud scheme.
Woodard was found guilty after a 10-week jury trial on May 24.
“TARP is not an opportunity to finance banks failing under the weight of fraud,” Romero said. “Woodard directed a culture of pervasive deceit, corruption and arrogance that spread like a disease at the bank.”