Two Execs of Failed United Commercial Bank Indicted

October 12 00:00 2011

New York, October 12 ( – Two former executives of a failed California bank have been indicted and are facing criminal and civil charges for their role in trying to hide loan losses. The bank had received a $300 million federal bailout during the financial crisis, before it collapsed.

According to an indictment on Tuesday, the former chief operating officer, Ebrahim Shabudin and the first vice president, Thomas Yu, of San Francisco-based United Commercial Bank face four criminal counts. Civil charges from SEC will also be pressed against Shabudin and Yu as also against the bank’s former chief executive, Thomas Wu.

United Commercial Bank catered largely to California’s Asian community. It had expanded at a very fast pace and was the ninth-largest bank to fail during the financial crisis. It was closed in 2009 by regulators.
Prohibition orders are being sought by the Federal Deposit Insurance Corporation to ban 10 former UCB officers from further participation in the banking industry. The prohibition orders will also be applicable to three additional officers who cooperated in the investigation and consented to the ban.

At their court appearance on Tuesday, no plea was entered by either Yu or Shabudin and each was released on $500,000 bond. Assistant U.S. Attorney Adam Reeves said in court that “This is an ongoing criminal investigation.” They will be arraigned in court on Oct. 20.