In what appears to be a suspicious move by the office of Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, federal agents swarmed two Florida banks Monday after a deal last week that didn’t work out, where one of them to receive taxpayer bailout funds.
After the quarterly financial results came in, a deal between Taylor, Bean & Whitaker, a mortgage lender based in Ocala, Florida, and Colonial BancGroup, the parent of Colonial Bank from Montgomery, Alabama, was halted, as numbers revealed Colonial Bank’s performance was terrible, prompting the process to stop.
Taylor, Bean & Whitaker were going to provide a $300 million boost to Colonial Bank before the numbers were revealed. Now that the deal has failed to emerge, executives say the likelihood of the banks surviving are very doubtful.
While not giving any details on the situation or circumstances, a spokeswoman for the inspector general’s office said there were two search warrants issued for banks in the state of Florida.
Another spokeswoman for Colonial Bank confirmed that a bank branch located in Orlando, Florida have been searched by federal agents, although also not elaborating on the details.
This is worth watching because of the timing of the actions by TARP officials. Why didn’t this happen beforehand? Does it lie within the legal parameters of TARP?
For example, by law TARP officials are responsible for legal issues only related to TARP; things such as fraud and other types of illegal actions. At this time there’s no idea of what the agency is investigating, or why it’s happening after the fact.
It’s just an odd and a little bit suspicious that this is going down the way it is, and makes you wonder if the Feds are overstepping their bounds because things didn’t work out the way they wanted, rather than legitimate concerns they knew about.