Special Inspector General for 

TARP

FY 2013

President’s Budget

Submission
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Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement.............................................................................................................. 3

1.1 – Appropriations Detail Table .............................................................................................. 3

1B – Mission Priorities, and Context.......................................................................................... 3

Program History and Future Outlook ......................................................................................... 5

Section 2 – Budget Adjustments and Appropriation Language............................................. 12

2.1 – Budget Adjustments Table............................................................................................... 12

2A – Budget Increases and Decreases Description................................................................... 12

2.2 – Operating Levels Table.................................................................................................... 13

2B – Appropriations Language and Explanation of Changes................................................... 14

2C – Legislative Proposals........................................................................................................ 14

Section 3 – Budget and Performance Report and Plan........................................................... 15

3A – Audit................................................................................................................................. 15

3.1.1 – Audit Budget and Performance Report and Plan.......................................................... 16

3B – Investigations ................................................................................................................... 17

3.1.2 – Investigations Budget and Performance Report and Plan............................................. 19

Section 4 – Supplemental Information...................................................................................... 20

4A – Capital Investment Strategy............................................................................................. 20
SIGTARP - 3

Section 1 – Purpose

1A – Mission Statement

To advance economic stability by promoting the efficiency and effectiveness of the management of the 

Troubled Asset Relief Program (TARP), through transparency, coordinated oversight, and robust 

enforcement against those persons and entities, whether inside or outside of government, who waste, 

steal, or abuse TARP funds.

1.1 – Appropriations Detail Table

Dollars in Thousands

FY 2011 FY 2012 FY 2013 % Change

Resources Available for Obligation Enacted Enacted Request FY 2012 to FY 2013

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

 Audit 83 $11,593 83 $14,626 83 $14,075 0.00% -3.77%

 Investigations 109 24,634 109 27,174 109 26,150 0.00% -3.77%

Subtotal New Appropriated Resources 192 $36,227 192 $41,800 192 $40,225 0.00% -3.77%

Other Resources:

 Unobligated Balances from PY - $2,844 - $3,800 - $6,565 0.00% 72.76%

Subtotal Other Resources - $2,844 - $3,800 - $6,565 0.00% 72.76%

Total Resources Available for Obligation 192 $39,071 192 $45,600 192 $46,790 0.00% 2.61%

Unobligated Balances from prior years include funds provided by P.L. 110-343 for general operating 

expenses, and by P.L. 111-22 which provided funds to ―prioritize the performance of audits or 

investigations of recipients of non-recourse Federal loans made under any ―Emergency Economic 

Stabilization Act of 2008, P.L. 110-343 program. P.L. 111-22 supplemental funding is not available for 

the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) general 

operations.

1B – Mission Priorities, and Context

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)

supports and complements Treasury’s strategic goals (1) to repair and reform the financial 

system and support the recovery of the housing market by assessing the effectiveness of 

Treasury’s activities and evaluating whether Troubled Asset Relief Program (TARP) recipients 

are satisfying their legal obligation and (5) to manage the government’s finances in a fiscally 

responsible manner as they relate to TARP. SIGTARP’s top priority is to promote transparency 

in the management and operation of TARP, ensuring the satisfaction of the public’s right to 

know how Treasury decides to invest the public’s money, how it manages the assets it obtains, 

and how TARP recipients use these funds. SIGTARP is the only agency solely charged with the 

mission of:

Transparency - Promoting transparency in the management and operation of TARP programs;

Coordinating Oversight:

 Prospectively advising Treasury concerning issues relating to compliance, internal controls 

and fraud prevention;

 Retrospectively assessing the effectiveness of Treasury’s activities and evaluating whether 

TARP recipients are satisfying their legal obligations; and 
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Robust Enforcement - Preventing, detecting, investigating and referring for prosecution cases 

of fraud, waste and abuse involving TARP funds or programs.

Promoting transparency in the management and operations of TARP programs is vital. Through 

the Emergency Economic Stabilization Act of 2008, P.L. 110-343 (EESA), the American 

taxpayer has been asked to fund an unprecedented effort to stabilize the financial system and 

foster economic recovery. In this context, the public has a right to know how Treasury decides 

to invest its money, how it manages the assets it acquires, and how TARP recipients use the 

funds. Transparency is a powerful tool to ensure accountability and that all those managing and 

receiving TARP funds will act appropriately and in the best interest of the country. 

SIGTARP views its oversight role prospectively, retrospectively, internally, and externally. 

Prospectively, SIGTARP advises Treasury on issues relating to compliance, internal controls and 

fraud prevention. Retrospectively, SIGTARP assesses the effectiveness of TARP activities over 

time and suggests improvements. Internally, SIGTARP’s oversight role reaches to Treasury 

officials and to other government employees who manage TARP-related programs. Externally, 

it reaches to the recipients of TARP funds, the other private participants in TARP-related 

programs and to vendors that have been retained to assist Treasury in implementing TARP. 

SIGTARP also plays a significant external coordinating role among TARP oversight bodies both 

to ensure maximum oversight coverage and to avoid redundant and unduly burdensome requests 

on Treasury personnel who manage the programs. 

Robust criminal and civil law enforcement involves the prevention, detection, and investigation 

of instances of fraud, waste, and abuse relating to TARP funds or operations. Through audit and 

investigative resources, and partnerships with other relevant law enforcement agencies, 

SIGTARP is committed to deterring, detecting, investigating, and referring for prosecution those 

persons and entities, inside or outside of the government, who waste, steal, or abuse TARP funds

or programs.

Since SIGTARP’s inception, its investigations have delivered substantial results, including:

 Asset recoveries of $151 million;

 Savings of $553 million in TARP funds that SIGTARP prevented from going to the nowfailed Colonial Bank;

 Criminal actions against 51 individuals, including 36 senior officers (CEOs, owners, 

founders, or senior executives) of their organizations;

 Criminal convictions of 28 defendants of whom 19 have been sentenced to prison (others are 

awaiting sentencing);

 Civil cases naming 37 individuals (including 25 senior officers) and 18 corporate or other 

legal entities as defendants (in some instances an individual will face both criminal and civil 

charges).

In accordance with the requirements of Section 6(f)(1) of the Inspector General Act of 1978 (as 

amended), the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) 

submits the following information related to the FY 2013 budget submission:

 The aggregate budget request for the operations of SIGTARP is $40,224,980

 The portion of this amount needed for SIGTARP training is $455,000;
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 The portion of this amount needed to support the Council of the Inspectors General on 

Integrity and Efficiency (CIGIE) is estimated at $84,000; and

 The amount requested for training satisfies all SIGTARP training needs for fiscal year 2013.

Program History and Future Outlook

Background: TARP consists of 13 programs all of which have been implemented. As of 

October 3, 2010, Treasury had obligated $474.8 billion for TARP. Of this amount, Treasury had 

expended or committed to expend approximately $413.2 billion as of September 30, 2011 

leaving $52.1 billion in three programs remaining as obligated and available to spend after 

accounting for reductions in exposure related to the Asset Guarantee Program (―AGP‖) and their 

termination of equity and debt facilities for AIG and Chrysler, respectively, that were never 

drawn down. The focus of TARP has begun to shift as the early TARP programs that invested 

huge sums in banks are now closed to further investments and most of the largest bank recipients 

have repaid their TARP funds. Treasury has stated that, going forward, TARP will focus on 

foreclosure mitigation efforts, small-business lending, and a continuation of support for the 

Asset-Backed securities (ABS) markets. 

TARP investment authority expired on October 3, 2010. As a result, Treasury cannot make new 

purchases or guarantees of troubled assets. This termination of authority, however, does not 

affect Treasury’s ability to administer existing troubled assets purchases and guarantees. In 

accordance with Section 106(e) of EESA, Treasury may expend TARP funds after October 3, 

2010 as long as it does pursuant to obligations entered into before that date. SIGTARP’s 

oversight mandate did not end with the expiration of Treasury’s authorization for new TARP 

funding. Rather, under the authorizing provisions of EESA, SIGTARP is to carry out its duties 

until the Government has sold or transferred all assets and terminated all insurance contracts 

acquired under TARP. In other words, SIGTARP will remain ―on watch‖ as long as TARP 

assets remain outstanding.

General Management: Section 121 of the EESA created SIGTARP as an independent agency 

within Treasury responsible for conducting, supervising, and coordinating audits and 

investigations of any actions taken under EESA. Of the four primary oversight bodies 

referenced in EESA, (i.e., SIGTARP, the Financial Stability Oversight Board, the Congressional 

Oversight Panel, and the Government Accountability Office), SIGTARP stands as the sole 

TARP oversight body charged with criminal law enforcement responsibility. SIGTARP 

commenced operations on December 15, 2008, with the swearing in of the Special Inspector 

General (SIG).

Between its commencement in December of 2008 and October 27, 2011, SIGTARP has been 

extraordinarily productive: publishing twelve comprehensive quarterly reports to Congress 

concerning TARP, opening more than 150 on-going investigations, initiating 28 audits and two 

evaluations, issuing 16 audit reports, leveraging oversight resources, testifying at more than 23 

Congressional hearings or briefings, building infrastructure, and hiring staff. In the latter 

regards, SIGTARP has secured permanent office space and equipment for staff; has contracted 

with public and private vendors for procurement assistance, publication consulting, data 

processing and analysis, and office equipment and services. SIGTARP has completed the move 

into its permanent space. Further, as of January, 2012, SIGTARP has hired 170 managers, 
SIGTARP - 6

lawyers, auditors, investigators, and other professionals with a wealth of experience in program 

auditing, criminal law enforcement, securities enforcement, and other relevant curricula. 

SIGTARP expects to be fully staffed by the end of FY 2012. To successfully accomplish this 

hiring challenge, SIGTARP relies on direct hire authority and dual compensation authority 

waiver delegated by the Office of Personnel Management, as well as authority provided by the 

Special Inspector General for the Troubled Asset Relief Program Act of 2009, P.L. 111-15.

Quarterly Reports to Congress: SIGTARP has issued twelve wide-ranging quarterly reports to 

Congress, describing the activities and plans of SIGTARP; explaining and evaluating the various 

TARP programs (both implemented and announced); reviewing the operations of the Office of 

Financial Stability (OFS), which administers TARP; and recommending changes to TARP 

programs and procedures to increase transparency and effective oversight and decrease the

potential for fraud, waste and abuse. SIGTARP expends substantial time and resources on its 

reports to Congress, which are designed to be the comprehensive reference concerning TARP 

activities for policy makers, Congress and the American people. SIGTARP’s reports satisfy the 

requisite reporting requirements of SIGTARP’s authorizing statute by detailing its operations; 

describing the categories of troubled assets purchased or otherwise procured by Treasury; 

explaining the reasons Treasury deemed it necessary to purchase each troubled asset; listing each 

financial institution from which such troubled assets were purchased; listing and detailing 

biographical information on each person or entity hired to manage such troubled assets; 

estimating the total amount of troubled assets purchased, the amount of troubled assets held, the 

amount of troubled assets sold, and the profit or loss incurred on each sale or disposition of each 

such troubled asset; and listing the insurance contracts issued. These quarterly reports are 

available at http://www.sigtarp.gov/reports.shtml.

To date, SIGTARP’s quarterly reports include 85 detailed recommendations to improve TARP 

programs and procedures. Treasury has adopted many of these recommendations, and Congress 

has effectively required OFS to implement several that it has rejected. For example, 

recommendations included in SIGTARP’s April 21, 2009 Quarterly Report to Congress were 

largely adopted and enacted into law by section 402 of P.L. 111-22. In the June 28, 2011

quarterly report, SIGTARP made important recommendations related to Treasury’s housing 

programs, and Treasury adopted a prior SIGTARP recommendation that gives additional relief to 

unemployed homeowners. In the current quarterly report dated October 27, 2011, SIGTARP 

published an audit questioning $8.1 million in legal fees Treasury paid to law firms. SIGTARP 

also made four new recommendations to improve service performance in TARP’s housing 

programs.

Investigative Activities: SIGTARP is the only Agency whose primary law enforcement mission 

is the swift and robust detection and investigation of those who profit criminally from TARP. 

SIGTARP’s Investigations Division (ID) has developed into a sophisticated white-collar law 

enforcement agency. Currently, the Investigative Division has more than 150 on-going criminal

and civil investigations, which concern suspected TARP fraud, accounting fraud, securities 

fraud, insider trading, bank fraud, mortgage fraud, mortgage servicer misconduct, fraudulent 

advance-fee schemes, public corruption, false statements, obstruction of justice, theft of trade 

secrets, money laundering, and tax-related investigations. Although the majority of SIGTARP’s 

investigative activities remain confidential, highlights from several cases that have been brought 
SIGTARP - 7

as the result of SIGTARP’s investigations include the following (details are in the quarterly 

report):

 United Commerical Bank/UCBH Holdings, Inc: On September 15, 2011, a federal grand 

jury returned an indictment against Ebrahim Shabudin and Thomas Yu, two former senior 

executives of United Commerical Bank ―UCB‖. The indictment includes charges for 

conspiracy, securities fraud, falsifying corporate books and records, and lying to auditors. 

Treasury became an investor in the Bank when UCBH received approximately $298 million 

in TARP funds. The investigation is ongoing.

 Colonial Bancgroup/Taylor, Bean & Whitaker: On April 19, 2011, Lee Bentley Farkas was 

convicted in a jury trial of 14 counts of bank, wire and securities fraud that included charges 

relating to his role in attempting to steal $553 million from TARP through the fraudulent 

application of the Colonial BancGroup, Inc (―Colonial‖) to the Capital Purchase Program 

(―CAP‖). To date, six individuals from Colonial Bank and TBW have entered guilty pleas 

and were sentenced to prison by the U.S. District Court for the Eastern District of Virginia 

for their roles in various aspects of the bank and TARP-fraud schemes. On June 30, 2011, 

Mr. Farkas was sentenced to serve 30 years in prison.

 The Park Avenue Bank: On October 8, 2010, Charles Antonucci, pled guilty to offenses 

including securities fraud, making false statements to bank regulations, bank bribery, and 

embezzlement of bank funds. With his guilty plea, Antonucci became the first defendant 

convicted of attempting to steal from the taxpayer’s investment in TARP funds. On May 18, 

2011, Carlos Peralta was sentenced to 12 months and one day of confinement and three years 

of supervised release for wire fraud. Peralta participated in a fraudulent investment scheme 

through which he caused the pastors of a church in Coral Springs, Florida, to wire $103,940 

from a Florida band account to one at The Park Avenue Bank in New York.

 Bank of America: On February 22, 2010, the Southern District of New York approved a 

$150 million civil settlement between the SEC and Bank of America to settle all outstanding 

SEC actions against the firm. On February 4, 2010, the New York Attorney General along 

with SIGTARP charged Bank of America, its former Chief Executive Officer Kenneth D. 

Lewis, and its former Chief Financial Officer Joseph L. Price with civil securities fraud. 

According to the allegations, in order to complete a merger between Bank of America and 

Merrill Lynch & Co., Inc. (Merrill Lynch), the defendants failed to disclose to shareholders 

spiraling losses at Merrill Lynch. Additionally, after the merger was approved, it is alleged 

that Bank of America made misrepresentations to the Federal Government in order to obtain 

tens of billions of dollars in TARP funds.

 Nations Housing Modification Center: Glenn Steven Rosofsky, Roger Jones and Michael 

Trap pled guilty to their involvement in a fraudulent loan-modification scheme and were

sentenced to incarceration and 36 months of supervised release and ordered to pay restitution. 

 Mount Vernon Money Center (MVMC): On June 16, 2011, Robert Egan and Bernard 

McGarry were sentenced to 11 and five years in prison, respectively, and three years 

supervised release. Egan and McGarry misappropriated their clients’ money — including the 

funds of several institutions in which the American taxpayer was an investor through TARP 
SIGTARP - 8

— to fund tens of millions of dollars in operating losses in MVMC’s businesses, to repay 

outstanding client obligations, and to enrich themselves at their clients’ expense. 

 FirstCity Bank: On the morning of March 20, 2011 Mark A. Conner was arrested as well as 

Clayton A. Coe on March 27, 2011 at Miami International Airport upon their return from the 

Turks and Caicos Islands on Federal bank fraud charges relating to alleged misconduct at 

First City, which was an unsuccessful TARP applicant. The indictment alleges that Conner, 

Coe, and others conspired to defraud FirstCity’s loan committee and board of directors into 

approving multiple, multi-million dollar commercial loans to borrowers who, unbeknownst 

to FirstCity, were actually purchasing property owned by Conner or Coe personally. Their 

actions then caused at least 10 other federally insured banks to invest in the fraudulent loans 

– in effect shifting all or part of the risk of default to the other banks. To cover their tracks, 

and as part of the alleged scheme, Connor, Coe, and their co-conspirators routinely misled 

federal and state bank regulators and examiners; attempted to obtain federal government 

assistance through TARP; and engaged in other misconduct in an attempt to avoid seizure by 

regulators and prevent the discovery of their fraud scheme. FirstCity was seized by state and 

federal authorities on March 20, 2009. 

 Orion Bank: On March 30, 2011, a Federal grand jury returned an indictment against Jerry J. 

Williams, former president, CEO, and board chairman of Orion Bancorp, Inc., and Orion 

Bank (―Orion‖), for conspiracy to commit bank fraud and to deceive federal and state bank 

examiners. In October 2008, Orion Bancorp, Inc., filed an application for $63 million of 

TARP money through CPP. According to the indictment, Williams orchestrated a complex 

conspiracy to fraudulently raise $100 million in capital and falsify bank records in order to 

mislead state and federal regulators as to the bank’s true financial condition. 

On March 30, 2011, criminal information was filed separately charging Francesco Mileto, 

Thomas Hebble, and Angel Guerzon for their involvement in the scheme. On May 2, 2011, 

Francesco Mileto, a former customer of Orion, Thomas Hebble and Angel Guerzon all pled 

guilty to conspiracy to commit bank fraud while Hebble and Guerzon also pled guilty to 

obstruction of a Federal bank examination. They are expected to be sentenced in 2012.

Florida’s Office of Financial Regulation closed Orion Bank on November 13, 2009, and 

named the FDIC as receiver and the FDIC estimates that Orion’s failure will cost the Deposit 

Insurance Fund more than $600 million. 

 HomeFront, Inc.: On January 29, 2011, a criminal complaint was filed charging Lori J. 

Macakanja with mail fraud and falsifying documents in connection with a scheme to defraud 

struggling homeowners seeking mortgage modifications. Macakanja was employed as a 

housing counselor by HomeFront, Inc. (―HomeFront‖), a HUD-approved housing counseling 

agency in western New York. The complaint alleges that more than 100 HomeFront clients 

were collectively defrauded of more than $200,000. 

 Galleria USA, Inc.: On March 9, 2011, a Federal grand jury returned an indictment against 

Thomas Chia Fu and his wife, Cheri L. Shyu, owners of Galleria USA, Inc. (―Galleria‖) for 

defrauding a consortium of eight banks, including several TARP recipients. According to the 
SIGTARP - 9

indictment, the defendants fraudulently obtained and drew on a $130 million line of credit by 

exaggerating Galleria’s in-transit inventory and accounts receivables and by fabricating bills 

of lading and invoices to hide the company’s true financial status. 

 Omni National Bank: On January 5, 2011, Karim Lawrence pled guilty to one count of 

corruptly accepting hundreds of thousands of dollars in cash and other things of value in 

exchange for the awarding of Omni National Bank (―Omni‖) funded renovation contracts on 

foreclosed properties owned by Omni. Prior to its failure, Omni applied for, but did not 

receive TARP funding under CPP. Karim Lawrence, a former loan officer of Omni, Jeffrey 

L. Levine, a former executive vice president of Omni and Delroy Oliver Day were sentenced 

to prison on charges of accepting bribes, false bank statements and charges of bank fraud. 

Previously, Brent Merriell was sentenced to prison for his role in a scheme to prompt Omni 

to forgive $2.2 million in loans.

 Karl Rodney (New York Carib News, Inc.): On July 22, 2011, Karl B. Rodney was 

sentenced to two years’ probation, plus a fine and community service, following his previous 

guilty plea to one count of making a false statement within the jurisdiction of a Committee of 

the U.S. House of Representatives.

 Compliance Audit Solutions: On April 28, 2011, a Federal grand jury returned an indictment 

against three individuals, Ziad al Saffar, Sara Beth Rosengrant, and Daniel al Saffar, for 

allegedly perpetrating a fraudulent mortgage modification business under the names 

Compliance Audit Solutions, Inc. (―CAS‖), and CAS Group, Inc. Sallar, Rosengrant and 

Saffar were each charged with one count of conspiracy to commit wire fraud and mail fraud. 

All three were arrested on April 29, 2011 and the case is being investigated by SIGTARP and 

FBI. 

Audit Activities: SIGTARP’s Audit Division (AD) conducts, supervises, and coordinates 

programmatic audits with respect to the operation of TARP and recipients’ compliance with their 

obligations under relevant law and contracts; as well as evaluation of TARP policies and 

procedures and provides recommendations to Treasury. With respect to auditing, AD is 

designed to provide SIGTARP with maximum flexibility to identify the scope and methodology 

of audits to ensure a rigorous and timely review of policy and procedures of specific programs 

within TARP. The audit results identify program deficiencies or weaknesses and their impact on 

the efficiency and effectiveness of the program, how funds were expended, and 

recommendations to improve the operations of TARP. Since its inception, SIGTARP has 

initiated a total of 28 audits and two evaluations. SIGTARP has issued 16 audit reports. In 

addition, 12 other previously announced audits and evaluations are in progress, the remaining 

announced projects were either closed out or terminated. 

The following audits and the findings may be reviewed in their entirety at 

http://www.sigtarp.gov/audits.shtml.

 Selecting Fund Managers for the Legacy Securities Public-Private Investment Program 

(PPIP), an audit report requested by the Chairman and Ranking Member of the

Subcommittee on Homeland Security and Governmental Affairs, examined Treasury’s 
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selection of fund managers for PPIP. The audit concluded that Treasury constructed a 

reasonable architecture to accomplish its objective of identifying larger firms to manage

PPIFs. 

 Extraordinary Financial Assistance Provided to Citigroup, Inc: In response to a 

Congressional request, SIGTARP examined the Government’s decision to provide additional 

funding and asset guarantees. The audit concluded that the Government constructed a plan 

that not only achieved the primary goal of restoring market confidence in Citigroup, but also 

carefully controlled the overall risk of Government loss on the asset guarantee. While there 

was a consensus that Citigroup was too systemically significant to be allowed to fail, that 

consensus appeared to be based as much on gut instinct and fear of the unknown as on 

objective criteria. 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) 

charged the Financial Stability Oversight Council (FSOC) with responsibility for developing 

the specific criteria and analytical framework for assessing systemic significance. 

 Legal Fees Paid Under the Troubled Asset Relief Program: An Expanded Report: On 

September 28, 2011 SIGTARP issued an expanded audit report requested by Senator Coburn 

which examined the Office of Financial Stability’s contracting processes to ensure that 

invoices submitted by the contractors accurately reflect the work performed. Specifically, 

SIGTARP found weaknesses in the OFS contract or legal services as well as the OFS 

policies for review of fee bills. The OFS contract for legal services did not contain 

sufficiently detailed requirements or instructions on how contractors should prepare fee bills

or how it should describe discrete tasks within each fee bill. SIGTARP made 

recommendations to improve controls over the review and payment of legal fee bills, 

including that OFS establish policies that prescribe specific invoice review procedures for 

COTRs to follow in their review of legal fee bills. Lastly, SIGTARP recommended that OFS 

review previously paid legal fee bills to identify unreasonable or unallowable charges and 

seek reimbursement as appropriate. 

 Exiting TARP: Repayment by the Largest Financial Institutions: On September 29, 2011 

SIGTARP released the audit report which examined the process under which the largest 

banks, known as SCAP institutions exited TARP. The report addressed the intent to which: 

(1) Treasury maintained a consistent and transparent role in the TARP repayment process; 

and (2) Federal banking regulators consistently coordinated and evaluated TARP repayment 

requests.

Leveraged Oversight Resources: SIGTARP actively coordinates its activities with other 

oversight and law enforcement bodies. In addition to meeting extensively with Treasury and the 

Federal Reserve concerning program proposals, SIGTARP regularly and continually coordinates 

with the Financial Stability Oversight Board, and the Government Accountability Office 

concerning our overlapping oversight responsibilities under EESA. Additionally, SIGTARP has 

initiated several efforts designed to augment audit and investigative resources. For example, 

SIGTARP founded the TARP Inspector General Council (TARP-IG Council), which includes 

the Comptroller General, the Inspector General for Treasury, the Federal Reserve Board, the 
SIGTARP - 11

FDIC, SEC, the Federal Housing Finance Agency, HUD, the Small Business Administration, 

and the Treasury Inspector General for Tax Administration. The TARP-IG Council meets as 

needed to discuss developments in TARP and coordinate interconnected audit and investigative 

issues. Similarly, SIGTARP organized and chairs the Term Asset-Based Securities Loan 

Facility/Public-Private Investment Program (TALF/PPIP) Task Force, which includes the 

Inspector General for the Federal Reserve Board, the Federal Bureau of Investigation (FBI), the 

Financial Crimes Enforcement Network (FinCEN), U.S. Immigration and Customs Enforcement, 

the Internal Revenue Service Criminal Investigation Division (IRS-CID), the SEC, and the 

United States Postal Inspection Service (USPIS). The task force members participate in 

briefings about the TALF/PPIP, collectively identify areas of fraud vulnerability, engage in 

training exercises, and coordinate audit and investigative efforts. SIGTARP has also forged 

partnerships and launched joint investigations with the FBI, the SEC, IRS-CID, and the Federal 

Trade Commission, among others.

On February 24, 2010, SIGTARP hosted the inaugural meeting of the Rescue Fraud Working 

Group. President Obama established the Financial Fraud Enforcement Task Force (―FFETF‖) 

―to investigate and prosecute significant financial crimes and other violations relating to the 

current financial crisis and economic recovery efforts, recover the proceeds of such crimes and 

violations, and ensure just and effective punishment of those who perpetrate financial crimes and 

violations.‖ A component of FFETF is the Rescue Fraud Working Group, co-chaired by the

Special Inspector General of TARP, Assistant Attorney General of the Criminal Division of the 

DOJ, and the Chief Counsel of OFS. Attendees at the inaugural meeting included officials from 

agencies across the Federal Government, including OFS; DOJ (Civil, Criminal, and Tax 

Divisions); the U.S. Attorneys’ Offices for the Northern and Central Districts of California, the 

Eastern District of Virginia, the Eastern and Southern Districts of New York, and the District of 

New Jersey; the Office of the Comptroller of the Currency; the Office of Thrift Supervision; the 

FinCEN; USPIS; the Board of Governors of the Federal Reserve; the SEC; and the FBI.
SIGTARP - 12

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Special IG for TARP FTE Amount

FY 2012 Enacted 192 $41,800

Changes to Base:

Maintaining Current Levels (MCLs): - $333

Maintaining Current Levels - $333

Efficiency Savings: - ($1,992)

Operations Partially Funded from No-Year Resources - ($1,992)

Subtotal FY 2013 Changes to Base - ($1,659)

Total FY 2013 Base 192 $40,141

Program Increases: - $84

Council of the Inspectors General on Integrity and Efficiency - $84

Total FY 2013 Request 192 $40,225

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .........................................................+$333,000 / +0 FTE

Maintaining Current Levels +$333,000 / +0 FTE 

Funds are requested for inflation adjustments (1.7 percent) in non-labor expenses such as GSA 

rent adjustments, postage, supplies and equipment and health benefits and the increase in Federal 

Employees Retirement System participation. Funds are also required for the proposed 2013 pay 

raise (0.5 percent).

Efficiency Savings ......................................................................................-$1,992,000 / +0 FTE

Operations Partially Funded from No-Year Resources -$1,992,000 / +0 FTE 

Reduction in general operating costs to occur from the annual account. SIGTARP will instead 

continue to use its mandatory funding.

Program Increases .........................................................................................+$84,000 / +0 FTE

Council of the Inspectors General on Integrity and Efficiency +$84,000 / +0 FTE 

Funds requested for Council of Inspectors General on Integrity and Efficiency (CIGIE) will 

support coordinated government-wide activities that identify and review areas of weakness and 

vulnerability in Federal programs and operations with respect to fraud, waste, and abuse.
SIGTARP - 13 

2.2 – Operating Levels Table 

Dollars in Thousands

 FY 2011 FY 2012 FY 2013

 Actual President's Enacted Proposed Proposed Request

Special IG for TARP Budget Reprogra Operating

 mmings Level

FTE 140 192 192 0 192 192

Object Classification

11.1 - Full-time permanent 12,420 17,339 17,607 0 17,607 18,391

11.3 - Other than full-time permanent 2,277 1,766 2,571 0 2,571 2,279

11.5 - Other personnel compensation 1,548 1,741 1,700 0 1,700 1,578

11.7 - Other Personnel Compensation 0 413 0 0 0 0

11.9 Personnel Compensation (Total) $16,245 $21,259 $21,878 $0 $21,878 $22,248

12 - Personnel benefits 4,048 5,346 5,065 0 5,065 5,896

21 - Travel and transportation of persons 1,003 1,000 1,061 0 1,061 1,200

23.2 - Rental payments to others 197 0 197 0 197 202

23.3 - Communication, utilities, and misc charges 41 172 55 0 55 55

24 - Printing and reproduction 194 195 195 0 195 196

25.1 - Advisory and assistance services 5,017 7,254 4,000 0 4,000 3,796

25.2 - Other services 38 741 83 0 83 87

25.3 - Other purchases of goods and services from Govt. accounts 8,289 9,674 8,175 0 8,175 5,367

26 - Supplies and materials 427 410 518 0 518 530

31 - Equipment 513 1,223 548 0 548 638

32 - Land and structures 2 0 0 0 0 0

42 - Insurance claims and indemnities 0 100 10 0 10 10

Total Budget Authority $36,014 $47,374 $41,800 $0 $41,800 $40,225

Budget Activities:

Audit 12,605 20,371 14,626 0 14,626 14,075

Investigations 23,400 27,003 27,174 0 27,174 26,150

Total Budget Authority $36,014 $47,374 $41,800 $0 $41,800 $40,225
SIGTARP - 14

2B – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

SPECIAL INSPECTOR GENERAL FOR THE TROUBLED 

ASSET RELIEF PROGRAM

Federal funds

SALARIES AND EXPENSES

For necessary expenses of the Office of the Special Inspector 

General in carrying out the provisions of the Emergency 

Economic Stabilization Act of 2008 (Public Law 110-343),

[$41,800,000] $40,224,980. (Department of the Treasury 

Appropriations Act, 2012.)

2C – Legislative Proposals

SIGTARP has no legislative proposals. 
SIGTARP - 15

Section 3 – Budget and Performance Report and Plan

3A – Audit

($14,075,000 from direct appropriations): 

This program supports SIGTARP’s priority of coordinated oversight by providing 

recommendations to Treasury so that TARP programs can be designed or modified to facilitate 

effective oversight and transparency to prevent fraud, waste, and abuse. 

The Audit Division (AD) conducts, supervises, and coordinates programmatic audits with 

respect to Treasury’s operation of TARP and the recipients’ compliance with their obligations 

under relevant law and contracts; as well as evaluation of TARP policies and procedures. With 

respect to auditing, the division is designed to provide SIGTARP with maximum flexibility in 

the size, timing, and scope of audits so that, without sacrificing the rigor of the methodology, 

audit results, whenever possible, can be generated rapidly both for general transparency’s sake 

and so that the resulting data can be used to improve the operations of TARP. 

Regarding policy review and technical assistance, a particular focus of AD is ensuring that 

appropriate internal controls are in place and are complied with, both by Treasury in its 

management of TARP and by the recipients of TARP funds, including vendors and the entities in 

which money is invested. Where controls or compliance are found to be lacking, or where 

particular aspects or policies are found ineffective at reaching TARP’s goals, AD assists the SIG 

to fashion recommendations to resolve such issues. The goal owner for this budget activity is 

Kurt Hyde, Deputy Special Inspector General Audit Division.

Description of Performance: 

One of the primary functions of SIGTARP is to ensure that members of Congress remain 

adequately and promptly informed of developments in TARP initiatives and of SIGTARP’s 

oversight activities. To fulfill that role, the Special Inspector General and staff meet regularly 

with Congress and staff. In FY 2011 SIGTARP exceeded its performance goal, ―Congressional 

Requests for Testimony‖ by completing five testimonies. SIGTARP anticipates that Congress 

will continue to have interest in SIGTARP’s work and will continue to request at least four 

testimonies in FY 2012 and FY 2013.

The performance goal, ―Completed Audit Products‖ includes audit reports, quarterly reports and 

memoranda that promote the efficiency and effectiveness of the Troubled Asset Relief Program 

(TARP). SIGTARP developed an audit plan using a risk-based planning process to identify 

projects that will provide the maximum benefit to TARP, Congress and the taxpayers. The 

maximum benefit is to assure the general public that TARP funds are not expended by recipients 

or other entities on waste, fraud or abuse. SIGTARP’s risk assessment identified costs to 

taxpayers, program successes and failures thus far, materiality, and a review of work completed 

by the Congressional Oversight Panel and their recommendations. Presently there are five ongoing audits and two evaluations that have been requested by Congress in addition to 

SIGTARP’s five self-initiated audits that include areas in the Capital Purchase Program (CPP), 

Office of the Special Master for Executive Compensation, Institutions exiting the CPP through

the Small Business Lending Fund and Making Home Affordable Program. SIGTARP completed 

13 audit products in FY 2011, exceeding the goal of 12 during the reporting period. The FY 
SIGTARP - 16

2012 goal is to issue 12 audit products which factors in current on-going audits, quarterly reports 

as well as other requirements such as Congressional requests. In FY 2013, the number of audit 

products is reduced to 10 due to the anticipated shifting of resources. Throughout this process, 

SIGTARP’s risk assessment plan will be utilized to determine audit requirements as well as 

requests made by Congress and the required quarterly report. 

In order to measure the impact of reports, SIGTARP measures the ―percent of recommendations 

implemented‖. In FY 2011, 50 percent were implemented by Treasury’s Office of Financial 

Stability (OFS). Although the goal of 70 percent was established by SIGTARP, OFS is working 

on implementing the recommendations and planned corrective actions dates that will extend into 

FY 2012. SIGTARP will continue to make recommendations to improve the efficiency and 

effectiveness of TARP and will continue to work with the OFS to implement these 

recommendations and follow the status of the planned corrective actions that span multiple 

reporting periods.

To better reflect AD’s performance and the fact that corrective actions span multiple periods, 

SIGTARP’s plan is to change the metric to ―Percent of Recommendations Agreed to by the 

Office of Financial Stability‖ beginning in FY 2013 with a goal of 70 percent.

3.1.1 – Audit Budget and Performance Report and Plan

Dollars in Thousands 

Audit Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Enacted Enacted Enacted Enacted Request

 Appropriated Resources $0 $9,900 $11,593 $14,626 $14,075

Total Resources $0 $9,900 $11,593 $14,626 $14,075

Budget Activity Total $0 $9,900 $11,593 $14,626 $14,075

Measure FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Actual Actual Actual Actual Actual Actual Target Target

Congressional Requests for 

Testimony Completed (Units)

N/A N/A N/A 9 7 5 4 4

Number of Completed Audit 

Products (Units)

N/A N/A N/A 3 9 13 12 10

Percent of Recommendations

Agreed to by the Office of 

Financial Stability

N/A N/A N/A N/A N/A N/A N/A 70.0

Percent of Recommendations 

Implemented (%)

N/A N/A N/A 100.0 43.0 50.0 70.0 DISC

Key: DISC - Discontinued and B - Baseline

Percentage of Recommendations Implemented measure will be discontinued in FY 2013 and replaced with 

Percentage of Recommendations Agreed to by the Office of Financial Stability.
SIGTARP - 17

3B – Investigations

($26,150,000 from direct appropriations): 

This program supports SIGTARP’s priority of Robust Enforcement by preventing, detecting, 

investigating and referring for prosecution cases of fraud, waste and abuse involving TARP 

funds or programs. 

Investigations Division (ID) supervises and conducts criminal and civil investigations into those 

persons and entities, whether inside or outside of government, who waste, steal, or abuse TARP 

funds or programs. The division is comprised of experienced financial and corporate fraud 

investigators, including not only special agents, but also forensic analysts, and investigative

attorneys. This structure provides SIGTARP with a broad array of expertise and perspectives in 

developing the most sophisticated investigations. In the interests of maximizing criminal and 

civil enforcement, ID coordinates closely with other law enforcement agencies with the goal of 

forming law enforcement partnerships, including task force relationships, across the Federal 

government to leverage SIGTARP’s expertise and unique position. 

ID manages SIGTARP’s Hotline which accepts and processes telephone, e-mail, website, and inperson complaints. One of SIGTARP's primary investigative priorities is to operate the 

SIGTARP Hotline, thus providing a simple, accessible way for the American public to report 

concerns, allegations, information, and evidence of violations of criminal and civil laws in 

connection with TARP. From its inception in February 2009 through September 30, 2011, the 

SIGTARP Hotline has received and analyzed more than 28,558 Hotline contacts. A substantial 

number of SIGTARP’s investigations were generated in connection with Hotline tips. The 

SIGTARP Hotline can receive information anonymously, and the confidentiality of 

whistleblowers is protected to the fullest extent possible. The goal owner for this budget activity 

is Scott Rebein, Deputy Special Inspector General Investigations Division.

Description of Performance: 

One of SIGTARP’s primary investigative priorities is to operate the SIGTARP Hotline and thus 

provide a simple, accessible way for the American public to report concerns, suggestions, 

information, and evidence of violations of criminal and civil laws in connection with TARP. 

SIGTARP referred 76 percent of ―Hotline Complaints for Investigation or to the Office of 

Financial Stability within 14 days of Receipt,‖ exceeding the goal of 65 percent. During 

FY2011, considerable effort and overtime was spent reviewing and referring complaints to meet 

the public’s demand for action regarding the mortgage crisis. In FY 2011, the Investigations 

Division opened 80 investigations and closed 27 investigations. There were more than 150 

active investigations as of the end of September 30, 2011. This includes 127 investigations 

involving institutions that applied for or received TARP funding through TARP’s Capital 

Purchase Program (CPP). These investigations concern suspected TARP fraud, accounting 

fraud, securities fraud, insider trading, bank fraud, mortgage fraud, mortgage-servicer 

misconduct, fraudulent advance-fee schemes, public corruption, false statements, obstruction of 

justice, trade secrets theft, money laundering, and tax-related investigations. SIGTARP 

anticipates a 70 percent referral rate for FY 2013. SIGTARP has increased staff during the past 

year to enable the Investigations Division to handle its growing inventory of and to expedite 

these investigations. In addition, SIGTARP continues to streamline the complaint referral 
SIGTARP - 18

process through the use of information technology, additional training for staff members, and 

concerted outreach to prosecutorial agencies.

A preliminary investigation is the period during which the investigator gathers fundamental 

information to evaluate the need to continue the case by converting it to a full investigation or to 

close the case. In FY 2011, the ―Percentage of Preliminary Investigations Converted to Full 

Investigations‖ was 88 percent, exceeding the goal of 40 percent. This success is attributed to 

SIGTARP proactively identifying indicators of fraud related to TARP, receiving more 

substantial case leads, and complaint referrals from other agencies as the Investigations Division 

has developed its identity as a premier ―white collar crime‖ law enforcement agency. However, 

as the Investigations Division has expanded, so has the depth and complexity of the cases under 

investigation. Consequently these highly complex cases require considerable investigative 

resources. Accordingly, this performance measure may need to be adjusted for FY2013 to 

reflect that preliminary cases will have to remain longer in the preliminary status prior to closure 

or conversion to a full investigation depending on available investigative resources. SIGTARP is 

anticipating a goal of 50 percent in FY 2013. The Investigations Division will continue to 

prioritize leads and fraud allegations and make effective, experienced decisions when opening 

Preliminary Investigations to ensure an appropriate commitment of investigative resources are 

available to devote to these investigations.

The ―Percentage of SIGTARP criminal or civil investigations that a federal, state, or local 

prosecutor has formally accepted to prosecute‖ was 94 in FY 2011, exceeding the target of 55 

percent. This success is directly related to the current economy. Since there is still significant 

public interest in TARP related cases, prosecutors are more likely to accept a TARP related case 

for prosecution if available resources dictate they choose between working on a TARP case or 

another type of traditional crime. SIGTARP’s investigative strategies have already produced 

outstanding results in bringing to justice those who have sought to profit criminally from TARP, 

with criminal actions against 51 individuals and civil cases naming 37 individuals and 18 

corporate or other legal entities as defendants, of which 28 have been convicted. SIGTARP’s 

investigative efforts have helped prevent an estimated $553 million in taxpayer funds from being 

lost to fraud as well as assisted in the recovery of $151 million in assets. To demonstrate the 

magnitude of our investigations, SIGTARP and its law enforcement partners proved a nearly $3 

billion fraud which was perpetrated by 7 individuals over a nearly 10 year period. In the future, 

if other prosecutorial priorities increase in importance, prosecutors may consider devoting fewer 

resources to TARP related cases, and correspondingly, the acceptance rate may decline. 

SIGTARP anticipates a 60 percent acceptance rate in FY 2013. The Investigations Division will 

continue to aggressively engage the U.S. Attorneys across the nation capable of prosecuting 

sophisticated white-collar criminal investigations involving TARP fraud to ensure their 

understanding of the importance and viability of SIGTARP investigations, the magnitude and 

complexity of the fraud in our investigations, and the impact these investigations have on the 

economic crisis. SIGTARP investigations have a major deterrent effect not only on those 

currently participating in financial fraud, but also deterring those considering participation in 

future fraud schemes.

As previously mentioned, SIGTARP ID coordinates closely with other law enforcement agencies 

with the goal of forming law enforcement partnerships across the Federal government to 
SIGTARP - 19

leverage SIGTARP’s expertise and unique position. Frequently other Federal law enforcement 

partner may pursue a lead or open a case and then request SIGTARP’s expertise and resources to 

lead the case. The overall ―percentage of cases in FY 2011 that were joint with other law 

enforcement agencies‖ was 40 percent, exceeding the target of 35 percent. This was primarily 

due the significant number of high profile cases opened in FY 2011. SIGTARP will continue to 

work in concert with law enforcement partners, but as our identity as a premier ―white collar 

crime‖ law enforcement agency develops with the U.S. Attorneys and other prosecutors, 

SIGTARP has been and may continue to work more cases independently. SIGTARP is 

projecting a goal of 45 percent for FY 2013.

3.1.2 – Investigations Budget and Performance Report and Plan

Dollars in Thousands 

Investigations Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Enacted Enacted Enacted Enacted Request

 Appropriated Resources $0 $13,400 $24,634 $27,174 $26,150

Total Resources $0 $13,400 $24,634 $27,174 $26,150

Budget Activity Total $0 $13,400 $24,634 $27,174 $26,150

Measure FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Actual Actual Actual Actual Actual Actual Target Target

Percentage of Hotline 

Complaints Referred for 

Investigation or to OFS within 

14 days of Receipt (%)

N/A N/A N/A 77.0 74.0 76.0 70.0 70.0

Percentage of Investigations 

Accepted by Prosecutors (%)

N/A N/A N/A 95.0 100.0 94.0 55.0 60.0

Percentage of Preliminary 

Investigations Converted to 

Full Investigations (%)

N/A N/A N/A 50.0 80.0 88.0 45.0 50.0

Percentage of cases that are 

joint agency/task force 

investigations (%)

N/A N/A N/A 60.0 50.0 40.0 40.0 45.0

Key: DISC - Discontinued and B - Baseline

Detailed information about each performance measure, including definition, verification and 

validation is available.
SIGTARP - 20

Section 4 – Supplemental Information

4A – Capital Investment Strategy 

IT funding has been critical in enabling SIGTARP to fulfill its mission of transparency, 

coordinated oversight, and robust enforcement. SIGTARP uses the services provided by 

Treasury Departmental Offices and Government Security Operations Center as part of 

Treasury’s headquarters operations. SIGTARP relies on the Treasury’s Office of the CIO and 

Departmental Offices Operations to provide a secure, independent infrastructure that is fully 

capable of supporting the mission and administrative requirements of a completely functional, 

bureau-level government agency with the technology requirements appropriate to an audit and 

investigative organization. 

The non-major IT investments are for acquisition, installation, integration, training and 

modifications of mission essential systems such as hotline information management, 

investigative case management, investigations database, counsel case management, forensic 

system management, and asset management which were established by SIGTARP because they 

were not provided by Treasury. In FY 2011, SIGTARP began to migrate these systems to 

Treasury for hosting services and an evaluation of Treasury’s shared services offerings (―cloud 

computing‖) for content management such as document management, Freedom of Information 

Act tracking and records management. 

SIGTARP’s IT strategy was to establish its mission systems and IT infrastructure in the initial 

years of operation with plans to limit its IT investments beginning in FY 2012 to updates, 

modifications, maintenance and equipment refreshment, consistent with its role as a temporary 

agency. For FY 2013, SIGTARP expects only ongoing infrastructure charges for headquarters 

and for remote office operations and routine maintenance, enhancements and modifications of its 

existing systems required to support its mission. 

SIGTARP’s non-IT investments include technical surveillance equipment. The Investigation 

Division requires specialized surveillance equipment in order to conduct criminal investigations

in cooperation with the FBI, IRS-CI and state/local law enforcement agencies. This specialized 

equipment ensures officer/agent safety to obtain evidence for prosecution while allowing 

interoperability with equipment used by the other agencies. In addition SIGTARP incurred costs 

for leasehold improvements to the headquarters facility and its regional offices.

A summary of capital investment resources, including major information technology and nontechnology investments is available.