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34 SR. BANK EXECUTIVE PLEADS GUILTY TO CONSPIRACY e Office of the Special Inspector General for TARP (SIGTARP) announced another victory in its fight to detect and punish fraud against banks that received funds as part of the Troubled Asset Relief Program. Michael W. Yancey pleaded guilty in June to one count of conspiracy to make false statements on a loan application. Yancey was a former senior vice president and commercial loan officer at TARP recipient Farmers Bank & Trust (Farmers Bank) in Great Bend, Kansas. "SIGTARP investigations have uncovered instances in which senior bank executives com- mitted fraud or other crimes against their bank prior to the financial crisis and then continued their schemes after the bank applied for and/or received federal taxpayer-funded TARP bailout funds," said Christy Romero, Special Inspector General for TARP (SIGTARP). "In this case, Yancey, a former senior vice president and commercial loan officer at TARP recipient Farmers Bank & Trust, lied about the true terms of a loan he secured on behalf of a bank customer in order to get the loan approved by the bank's loan committee. en, after the bank received TARP funds, Yancey recom- mended that the bank renew the loan without correcting the falsified information on file about the loan. Ultimately, Farmers Bank wasn't able to repay its TARP investment in full." In March 2007, Yancy assisted a bank customer in obtaining an $825,000 commercial loan for the purchase of real estate. e customer presented Yancy with a falsified contract for sale, which stated the purchase price to be 1.1 million dollars. In reality, the purchase price of the prop- erty was $850,000. Yancy, knowing the contract had been falsified, included it in the bank's file. Yancey and the bank customer inflated the purchase price in order to make it appear that the loan conformed to a maximum 75 percent loan-to-value ratio, which would allow the loan to be approved by the bank's loan committee. e scheme worked. e loan committee ap- proved the loan without issue. Additionally, Yancy petitioned the bank to approve a large line of credit for the bank customer by falsely stating that the real estate transaction involved a seller carryback in the amount of $150,000 and a borrower equity injection in the amount of $125,000. In subse- quent years, Yancy continued to recommend the renewal of the loan. In June 2009, Farmers Enterprises, Inc., of Great Bend, Kansas, the parent company of Farmers Bank, received $12 million in federal taxpayer funds through TARP. In November 2012, the Treasury Department sold its TARP investment in Farmers Enterprises back to the bank for approximately $11.5 million, as the bank exited the program. e bank's repurchase of the shares at a discount in a loss to the taxpayer in the amount of $500,000. "Crime against a TARP bank is crime perpetrated against the federal taxpayers who funded the TARP bailout. SIGTARP and our law-enforcement partners will bring to justice perpetrators of crime related to TARP and hold them accountable for their actions," Romero continued. Yancey faces a maximum penalty of five years in federal prison and a fine up to $250,000. GDP DECLINES IN FIRST QUARTER 2014 A revised estimate of gross domestic product (GDP) in the first quarter shows the economy turning in its worst performance since 2009 as consumer spending disappointed and outgoing trade declined. In its third and final estimate of first-quar- ter growth, the Department of Commerce recorded an annualized 2.9 percent decline in GDP throughout the year's first months. While analysts expected GDP growth to shrink further following the last estimate of a 1.0 percent decline, the reported number represents a sharper downturn than the 1.8 percent contraction that had been forecast. e Commerce Department's Bureau of Economic Analysis (BEA), which reports the numbers each quarter, said the third estimate reflects a smaller increase in consumer spending and a larger decline in exports than was previously estimated. In the fourth quarter of 2013, real GDP growth came in at an annualized rate of 2.6 percent. e quarterly slip came largely as a result of reduced inventory growth, said Doug Handler, chief U.S. economist for IHS Global Insight. "e recession-like quarter was adversely affected by the weather and an unusually large drop in inventory growth, which is a correction from the last half of 2013," Handler said in an analytical note. "Neither of these factors persisted in the second quarter, and we expect to see a rebound in growth to the 3.5–4.0 percent range." Paul Dales, senior U.S. economist for research firm Capital Economics, echoed that sentiment in his own outlook: "e latest data show that activity in the second quarter is rebounding. e monthly data for April suggest that Q2 consumption growth will be between 2.5 percent and 3.0 percent, that residential investment is rising, that net trade will be a smaller drag on growth, and that inventories will add to, rather than subtract from, growth." Americans reported spending $94 per day on average in mid-July, according to Gallup.com KNOW THIS

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