Two former Federal Home Loan Bank executives have been sentenced to a combined 10 years in federal prison for conspiring to lie to the government-sponsored financial institution, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
In July, several days into their trial, Terence Carlyle Smith, former FHLB - Dallas President, and Nancy B. Parker, former Chief Information Officer, both pleaded guilty to conspiracy to make false statements to a Federal Home Loan Bank.
U.S. District Judge Jane J. Boyle last week sentenced Mr. Smith, 62, to five years in federal prison and ordered him to pay $780,279.11 in restitution plus $4,219,720.89 in attorney’s fees to the bank and its insurance carriers. The judge sentenced Ms. Parker, 66, to five years in federal prison and ordered her to pay $313,681.25 in restitution plus $227,953 in attorney’s fees.
“These defendants attempted to trick a Federal Home Loan Bank into footing the bill for their exorbitant personal travel," said U.S. Attorney Nealy Cox. “We’re pleased the Judge held them accountable for undermining the public trust by handing down the maximum sentence."
“The actions of these defendants placed at risk the public’s trust in the Federal Home Loan Bank of Dallas. The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) is committed to investigating allegations of fraud committed against the Government Sponsored Enterprises, including the 11 Federal Home Loan Banks," said Catherine Huber, Special Agent in Charge of the FHFA-OIG’s Central Region Office. “The sentences handed down by the Court send a powerful message to those who would seek to victimize a Federal Home Loan Bank. We are proud to have partnered with the U.S. Attorney’s Office for the Northern District of Texas in this case."
In plea papers, the pair admitted that from 2009 to 2013, they submitted dozens of bogus expense reports to FHLB, claiming they’d attended professional conferences they never visited -- prompting FHLB to foot the bill for what was actually personal travel to Florida, California, and Nevada. They also admitted to repeatedly falsely reporting their number of unused vacation hours.
According to the Indictment filed in 2017, the scheme cost FHLB more than $1.2 million -- $780,000 in travel expenses, including airfare, limousine rides, concerts, vineyard tours, luxury hotel rooms, and lavish meals for Mr. Smith, Ms. Parker, and several colleagues, and $450,000 in unused vacation time reimbursements.
The Federal Housing Finance Agency Office of Inspector General led the investigation. Assistant U.S. Attorneys Errin Martin, Lindsey Beran, Tiffany Eggers, and Douglas Brasher prosecuted the case.
Source: U.S. Department of Justice, Office of the United States Attorneys
