Uncle Sam sues Estate of deceased man for false claim to treasury for $17.3 Million

The United States of America has sued the estate  of the late Layton P. Stuart, former owner and president of One Financial Corporation, and its wholly-owned subsidiary, One Bank & Trust N.A., both based in Little Rock, Arkansas, alleging that Stuart made misrepresentations to get the U.S. Department of the Treasury to invest $17.3 million of Troubled Asset Relief Program (TARP) funds in One Financial as part of Treasury’s Capital Purchase Program (CPP), the Justice Department announced today.

“TARP was enacted in 2008 to restore liquidity and stability to the financial system of the United States by injecting needed capital into financial institutions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Obtaining TARP funds based on false representations to the government frustrates those goals and harms the American taxpayer.”

The Government’s complaint says Stuart, on behalf of One Financial, applied in late 2008 for a TARP investment totaling $17.3 million.  The complaint says  Stuart knowingly made false statements about the financial condition of One Bank and its intentions for the use of the TARP funds.  Especially, says Uncle Sam, he stated the TARP application concealed serial frauds that Stuart and other One Financial directors and bank executives had been committing and intended to continue committing on One Bank. According to the complaint, the schemes involved Stuart’s diversion of funds from One Bank for personal use including, within 30 days of receiving the $17.3 million in TARP funds, the diversion of more than $2 million into personal accounts for his own use. Stuart was terminated from One Bank in September 2012.

The investigation was conducted by the U.S. Treasury, Internal Revenue Service-Criminal Investigation Division, the Office of the Special Inspector General for TARP, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Eastern District of Arkansas.  The case is captioned United States v. Estate of Layton P. Stuart, et al., No. 1:15-cv-01044-RDM (D.D.C.).

Jeffrey Newman represents whistleblowers