Bank Chairman Pleads Guilty to Using Public Funds to Purchase Luxury Vacation Condo

JEFFERSON CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Missouri bank chairman pleaded guilty in federal court today to misleading federal investigators about his use of $381,000 in bank bailout funds to purchase a luxury condominium in Fort Myers, Florida.

“At a time when many other Americans were losing their homes, he was siphoning off public funds to buy a luxury vacation condo in Florida,” Dickinson said. “These federal funds were intended to help stablilize the economy during a fiscal crisis. Instead, this disgraced business leader took advantage of the situation to benefit himself and other bank executives and then lied to federal investigators in an attempt to hide his scheme.”

Darryl Layne Woods, 48, of Columbia, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to a federal information that charges him with making a false writing.

Woods was the chairman and chief financial officer of Mainstreet Bank in Ashland, Missouri. He was also the chairman, president, and majority shareholder of Calvert Financial Corporation, the bank holding company for Mainstreet Bank.

“The purpose of TARP is to promote financial stability and lending in a time of national economic crisis, not to bankroll the purchase of luxury vacation properties for bank executives,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “When SIGTARP required Mainstreet Bank to disclose how it spent TARP funds, bank Chairman and CFO Woods failed to tell the truth that within days of receiving the TARP funds, the bank spent more than a third of the funds purchasing a waterfront condo in Florida for his and other executives’ use. SIGTARP and our law enforcement partners will hold accountable and bring to justice those guilty of crimes related to TARP.”

In November 2008, Calvert Financial applied to receive funds through the Troubled Asset Relief Program (TARP). TARP was created through the Emergency Economic Stabilization Act of 2008. The purpose of TARP was to provide capital to financial institutions to enable them to build their capital base and to increase the flow of financing to businesses and individuals. The U.S. Department of Treasury approved the request for TARP funds, and in January 2009 Calvert Financial received $1,037,000 through the TARP Capital Purchase Program.

Woods admitted today that he used $381,487 of the TARP funds to purchase the luxury condominium on February 2, 2009.

The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) was required to supervise, audit, and investigate institutions that received TARP funds. SIGTARP sent letters to various financial institutions seeking specific information as to how TARP funds were used by the institutions. Woods responded to that inquiry in a letter dated February 10, 2009.

Woods failed to disclose in his letter that a significant portion of TARP funds had been used to acquire the condominium. Failure to disclose the purchase of the condominium was a material misrepresentation of facts relating to the true use of TARP funds.

Under the terms of today’s plea agreement, the government will not bring any charges against his wife, Jackie Woods (Ralston), for any criminal offenses arising from the facts known by the government as the result of this investigation.

Under federal statutes, Woods is subject to a sentence of up to one year in federal prison without parole, plus a fine up to $100,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI and Special Inspector General for the Troubled Asset Relief Program (SIGTARP).