Special Inspector General for 

TARP

FY 2016

President’s Budget

February 2, 2015
SIGTARP - 2

Table of Contents

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

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

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

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

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

2.1 – Budget Adjustments Table............................................................................................... 13

2A – Budget Increases and Decreases Description................................................................... 13

2.2 – Operating Levels Table.................................................................................................... 14

2B – Appropriations Language and Explanation of Changes................................................... 15

2C – Legislative Proposals........................................................................................................ 15

Section 3 – Budget and Performance Plan ............................................................................... 16

3A – Audit................................................................................................................................. 16

3.1.1 – Audit Budget Activity Budget and Performance Plan.................................................. 17

3B – Investigations ................................................................................................................... 18

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

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

4A – Summary of Capital Investments..................................................................................... 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) and preventing and investigating fraud, waste, and 

abuse, through transparency, coordinated oversight, and robust enforcement.

1.1 – Appropriations Detail Table

Dollars in Thousands

Special Inspector General for TARP FY 2014 FY 2015 FY 2016 FY 2015 to FY 2016

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Audit 83 12,220 75 9,243 66 8,870 (9) (373) -12.00% -4.04%

Investigations 109 22,703 117 24,991 126 31,801 9 6,810 7.69% 27.25%

Subtotal New Appropriated Resources 192 $34,923 192 $34,234 192 $40,671 0 $6,437 0.00% 18.80%

Other Resources:

Unobligated Balances from Prior Years 0 6,683 0 10,957 0 6,495 0 (4,462) NA -40.72%

Available PPIP Funds 0 1,536 0 965 0 928 0 (37) NA -3.83%

Subtotal Other Resources 0 $8,219 0 $11,922 0 $7,423 0 ($4,499) NA -37.74%

Total Budgetary Resources 192 $43,142 192 $46,156 192 $48,094 0 $1,938 0.00% 4.20%

1B – Vision, Priorities and Context

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

was created by Congress as a law enforcement agency for the primary purpose of combatting 

white-collar crime related to TARP. From the beginning of the financial crisis, Congress 

recognized the high risk of fraud in TARP and took steps to protect the American public by 

creating SIGTARP. Senator Max Baucus, who proposed the creation of SIGTARP, said, “My 

concern here is, with such massive amounts of dollars dedicated so quickly, there is bound to be 

considerable fraud and misuse of funds.” Congress gave SIGTARP the authority to search, 

seize, arrest, which not all inspectors general have. 

Given the law enforcement purpose for which it was created, SIGTARP’s activities should not, 

and do not, track with Treasury’s activities in TARP, and its budget should reflect that. A 

company’s repayment or exit from TARP must not serve as a shield to criminal or civil liability 

for breaking the law. In addition, SIGTARP has conducted several audits to bring transparency 

to historical decision making in TARP, often based on requests from members of Congress. 

These reports can serve as important lessons learned. 

Under the same legislation that created TARP, the Emergency Economic Stabilization Act of 

2008 (EESA), Congress created SIGTARP, and intentionally designed the lifespan of SIGTARP 

to coincide with the last dollar of TARP or last monetary obligation related to TARP. Congress’ 

intent is for SIGTARP to be on watch as long as TARP funds or commitments are outstanding. 

SIGTARP’s law enforcement efforts are focused on being “on watch” to protect taxpayers 

(through Treasury) from becoming victims of crime, whether directly, through a TARP program, 
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or through a TARP investment. To the extent that a crime occurs, SIGTARP will seek to bring 

justice, accountability, and deterrence. 

Knowing that criminal investigations take years, as do the prosecutions that follow, from its 

inception SIGTARP planned that it would continue in a ramp-up stage as it gained expertise in 

how to uncover and unravel TARP-related crime and not hit steady state until the year 2014 

(six years after its creation). It is not SIGTARP’s decision how long an investigation may last 

because it is the prosecutor who must determine when there is sufficient evidence to support 

criminal charges. SIGTARP does not end its work at the time an investigation results in criminal 

charges. Given that SIGTARP investigations include assessing documents and interviewing

witnesses, in order to ensure a successful prosecution, SIGTARP must support the Department of 

Justice (DOJ) and the prosecutors from indictment to trial, to sentencing and appeal. DOJ has 

consistently relied on SIGTARP to ensure success in prosecutions. It is often the case that a 

SIGTARP agent will testify at a trial. Given the knowledge base learned in its investigations, 

SIGTARP agents, investigators, attorneys, and analysts will assist DOJ in trial preparation, posttrial briefing for sentencing, and briefing for appeals. 

SIGTARP’s mission plays a large role in restoring and strengthening public confidence in the 

financial system and justice system. DOJ selected SIGTARP as its co-chair of the Rescue Fraud 

Working Group of the President’s Financial Fraud Enforcement Task Force. Rescue fraud is 

fraud related to the financial crisis. SIGTARP and its law enforcement partners bring confidence 

to the justice system by holding criminals accountable for crimes that either contributed to the 

financial crisis or arose from the financial crisis as it relates to TARP. In addition, SIGTARP 

makes recommendations designed to improve TARP programs that can result in improvement of 

public confidence in the government. 

Just as the work SIGTARP performs maximizes resources of DOJ in prosecutions, SIGTARP 

partners with multiple law-enforcement agencies to maximize its resources. It is always the case 

that there will be other investigative agencies that have jurisdiction concurrent with SIGTARP. 

Congress specifically contemplated that. However, SIGTARP has gained, and continues to gain 

with each investigation, an expertise in what to look for to root out TARP-related crime.

Strategic Goals and Objectives

SIGTARP supports and complements Treasury’s Strategic Goal 1: promote domestic economic 

growth and stability while continuing reforms of the financial system. In particular, through its 

oversight and investigations of TARP-related activities, SIGTARP supports Objective 1.1: 

promote savings and increased access to credit and affordable housing options, Objective 1.2: 

wind down emergency financial crisis response programs, and Objective 1.3: complete 

implementation of financial regulatory reform initiatives, continue monitoring capital markets, 

and address threats to stability.

Additionally, through open and transparent communication with Congress, SIGTARP supports 

Treasury’s Strategic Goal 5: create a 21st

-century approach to government by improving 

efficiency, effectiveness, and customer interaction. Through expedient responses to inquiries 

from Congress, SIGTARP supports Objective 5.4: create a culture of service through relentless 

pursuit of customer value.
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FY 2016 Budget Request

SIGTARP’s FY 2016 budget request of $40,671,000 seeks a higher appropriation than prior 

years. However, this is not because SIGTARP anticipates spending much more in FY 2016 than 

in prior years. SIGTARP’s spending has remained at relatively steady levels since going steady 

state in FY 2014 as anticipated. However, in past years, SIGTARP has been able to use no-year 

funding provided by Congress at SIGTARP’s inception to supplement appropriated funding. 

The funding SIGTARP seeks will provide resources to:

• Detect, stop, and investigate crime related to TARP;

• Support prosecutions of those defendants SIGTARP investigates;

• Provide significant oversight and transparency over the 145 financial institutions remaining 

in TARP as of September 30, 2014; and

• Provide oversight and transparency over TARP-funded housing programs which are 

scheduled to last as late as 2023.

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 2016 budget submission:

• The aggregate budget request for the operations of SIGTARP is $40,671,000;

• The portion of this amount needed for SIGTARP training is $342,000; and

• The portion of this amount needed to support the Council of the Inspectors General on 

Integrity and Efficiency is estimated at $109,620.

FY 2016 Priorities 

SIGTARP prioritizes its audit and investigative responsibilities, and works to allocate resources 

where they are needed most. 

Investigations

SIGTARP’s priority in FY 2016 is increasingly geared toward criminal investigations of TARPrelated crime. Given the growing number and complexity of TARP-related crimes that 

SIGTARP has already detected and is investigating, and the large number of pending 

prosecutions of defendants SIGTARP investigated that require SIGTARP support, SIGTARP 

recently shifted resources to support an increasing investigative workload. In addition, with the 

knowledge gained through investigations, SIGTARP is conducting more proactive efforts to root 

out crime. SIGTARP continues to uncover new TARP-related criminal schemes and anticipates 

that it will continue to open new investigations in FY 2016 and beyond. In FY 2016, SIGTARP 

anticipates allocating 78 percent of its appropriation to law enforcement efforts.

SIGTARP will continue to prioritize crime at TARP institutions where the government, 

including Treasury, is a victim of the crime. SIGTARP investigates crime that has led to 

criminal indictments and convictions of bank officers and their co-conspirators from TARP 

banks (as well as TARP applicant banks) including fraudulent bank books and records to apply 

for TARP, as well as crimes such as fraud by officers of a TARP institution to conceal the bank’s 

true financial condition after the institution received TARP funds and taxpayers became 

shareholders. SIGTARP also continues to prioritize fraud that has led to criminal convictions of 

bank borrowers that caused TARP banks to suffer losses that jeopardized the bank’s ability to 
SIGTARP - 6

repay TARP, particularly where Treasury took a loss. SIGTARP will also continue to prioritize 

crimes that put TARP programs at risk.

SIGTARP seeks corporate accountability as well as individual accountability, and deterrence, in 

the form of prison sentences, fines, and industry bans so that those who have broken the law are 

not in a position to repeat their criminal behavior. Removing those who break the law from 

serving in these industries reduces vulnerabilities and mitigates future financial system harm. It 

is this accountability that will instill confidence in our financial system and justice system. 

Persistent oversight and law enforcement are necessary to restore confidence and advance 

economic stability. Long-term full recovery from the financial crisis depends on it. 

Audit

Although Congress created SIGTARP as a law enforcement agency, Congress created SIGTARP 

as an office of inspector general, and all offices of inspector general conduct audits and 

evaluations. More than almost any other government program, the public has a strong desire for 

transparency into details about how TARP funds were used, and how the government made 

decisions in allocating TARP funds. SIGTARP’s audit work will continue to bring transparency 

in this area. Moreover, these reports provide important lessons learned for future government 

decision-making where the government may once again be faced with having to make significant 

decisions on an emergency basis without the benefit of time. SIGTARP’s audit products also

identify program deficiencies or weaknesses and their impact on the efficiency and effectiveness 

of TARP. Through audit products, SIGTARP makes recommendations to improve the efficiency 

and effectiveness of TARP programs and prevent fraud, waste, and abuse. 

As an example of audit priorities for 2016, TARP’s housing programs require oversight because: 

• There is $24.7 billion in TARP that remains to be spent, an amount larger than most 

government programs; 

• TARP’s housing programs need improvement to be able to provide sufficient help to as many 

homeowners as possible; and 

• Information gained through audits, investigations, and the SIGTARP Hotline highlights 

deficiencies and areas for improvement in TARP’s housing programs. Congress did not 

agree to authorize TARP as it was first proposed, but instead required that Treasury provide 

foreclosure relief programs for homeowners in TARP. Through audit and other reporting, 

SIGTARP works to improve the effectiveness and efficiency of TARP programs.

SIGTARP’s audit work will continue to focus on the Community Development Capital Initiative 

(CDCI) program that continues to have 66 small banks and credit unions, a program that is not 

winding down and is likely to remain until 2018. SIGTARP has conducted an investigation of 

one of the CDCI banks that has resulted in criminal charges against four bank officers and 

directors. Those charges are pending and no trial date has been set. With $465 million owed by 

CDCI institutions, SIGTARP will conduct oversight that could prevent fraud, waste, and abuse.

Key Accomplishments and Challenges

Investigations

SIGTARP law enforcement efforts are a crucial part of the Administration’s efforts to bring 

accountability to those that contributed to or arose from the financial crisis. Each year, the 
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number of people charged with a crime related to TARP increases significantly. This increase 

comes in part from the time it takes to investigate a case, and in part from the fact that due to 

SIGTARP’s growing expertise, SIGTARP has gotten better and better at detecting TARP-related 

crime. In addition, the number of defendants convicted and sentenced has also significantly 

increased each year.

Some of SIGTARP’s notable cases resulting in final resolution since July 2013 include:

• Jesse Litvak — This case is the only criminal case brought by President Obama’s Residential 

Mortgage Backed Securities Working Group, and it was investigated by SIGTARP. In 

January 2013, SIGTARP special agents arrested trader Jesse Litvak for criminally defrauding 

TARP’s securities trading program known as the Public Private Investment Program (PPIP). 

After a three-week trial in March 2014 which SIGTARP spent significant resources 

supporting and at which a SIGTARP agent testified, the jury convicted Litvak. In July 2014, 

he was sentenced to two years in prison and fined $1.75 million. His firm, Jefferies LLC, 

agreed to substantial corporate changes and a $25 million penalty as part of a nonprosecution agreement.

• Home Owners Protection Economics, Inc. (HOPE) — This case is one of the most egregious 

examples of a mortgage modification scam. SIGTARP special agents arrested four Florida 

men who scammed thousands of homeowners into paying up to $2,000 each for help getting 

into HAMP through software that was nothing more than the free HAMP application on 

Treasury’s website. They swindled homeowners out of more than $4 million which they 

used for extravagant trips to Dubai and France, luxury shopping sprees, and to pay their own 

mortgages on waterfront homes in Florida’s beach communities. After a two-week trial in 

November 2013 which SIGTARP spent significant resources supporting and a SIGTARP 

investigator testified, the jury convicted all four defendants. In February 2014, Christopher 

S. Godfrey and Dennis Fischer, president and vice president, respectively, were each 

sentenced to seven years in prison, Vernell Burris, Jr. was sentenced to just over one year in 

prison, and in April 2014, Brian M. Kelly was sentenced to just over one year in prison and 

fined $1,900. On August 22, 2014, the United States District Court for the District of 

Massachusetts ordered the four, together, to pay more than $110,000 in restitution to 

approximately 180 victims of their scam.

• Bank of the Commonwealth — SIGTARP unraveled a massive $41 million fraud scheme at 

the now-failed Bank of the Commonwealth to hide past due loans and remove foreclosed 

properties off of the bank’s books. A central part of the ten-week trial was that the bank had 

sought to fill the holes in its fraud-riddled books with TARP funds. The bank’s regulator 

September 2011 September 2012 September 2013 December 2014

Criminal charges 51 109 154 222

Convictions (others await trial) 28 71 112 160

Prison sentences (others await sentencing) 19 35 65 91

Civil charges 55 84 114 133

Individuals banned from industry 60 90

Results of SIGTARP Investigations

as of December 31, 2014

Cumulative Charges, Convictions, Sentences, and Industry Bans
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denied the bank TARP funds based on concerns over the bank’s health. However, it was 

SIGTARP that uncovered the fraud after the TARP application. The court sentenced 

10 people to prison including four bank officers. In November 2013, bank CEO Edward 

Woodard was sentenced to 23 years in prison and the vice president Stephen Fields was 

sentenced to 17 years in prison. Vice president of a bank subsidiary and the CEO’s son Troy 

Brandon Woodard was sentenced to eight years in prison. All defendants were ordered to 

pay restitution of the full estimated cost of the bank’s failure to the FDIC – $333 million. 

• SunTrust Bank — SIGTARP’s investigation led to DOJ entering into a non-prosecution 

agreement with TARP recipient bank SunTrust based on SunTrust Mortgage’s appalling 

treatment of homeowners in HAMP. Part of the conduct SIGTARP uncovered was that 

SunTrust failed to open so many homeowners’ applications for HAMP that eventually the 

floor buckled under the weight of unopened HAMP applications. Paperwork was lost and 

had to be resubmitted, and SunTrust failed to give most homeowners a decision for long 

periods of time. SunTrust misled homeowners and mass denied homeowners without 

reviewing their application, then lied to Treasury about the reasons for the denials. Some 

homeowners were foreclosed on while in HAMP, and saw their homes listed for sale in the 

local newspapers. SunTrust agreed to pay $320 million to resolve criminal allegations of 

mail fraud, wire fraud, and false statements to Treasury related to HAMP.

• Mainstreet Bank — On March 25, 2014, Darryl Woods, former chairman, president, and 

majority shareholder of Calvert Financial, the bank holding company for Mainstreet Bank,

was sentenced to eight months detention in a halfway house followed by four months home 

detention for lying to SIGTARP about how the bank used TARP funds. SIGTARP’s 

investigation uncovered that on February 2, 2009, days after receiving just over $1 million in 

TARP funds, Woods used $381,487 of the TARP funds to buy a seaside condo in Florida for 

his and other bank executives’ vacations. As part of an audit, SIGTARP sent each TARP 

bank a letter asking them what they did with the TARP funds. Woods responded to 

SIGTARP and made material misrepresentations without disclosing the purchase of the 

vacation condo.

• Colorado East Bank and Trust — On September 30, 2014 and October 3, 2014, respectively, 

Christopher Tumbaga, former loan officer at TARP bank Colorado East Bank and Trust, and 

his co-conspirator Brian Headle were each sentenced in the U.S. District Court for the 

District of Colorado to 36 months in federal prison and ordered to pay restitution of more 

than $1 million for their roles in a scheme to defraud the bank.

SIGTARP’s investigations continue to result in criminal charges. One example is SIGTARP’s 

investigation of Sonoma Valley Bank, which resulted in criminal charges on March 18, 2014, 

against four defendants, including two bank officers, for their role in a bank fraud that caused 

TARP recipient Sonoma Valley Bank to fail in August 2010. The bank never repaid the 

$8.65 million in TARP funds it received. All four defendants were arrested by SIGTARP special 

agents and SIGTARP law enforcement partners. SIGTARP’s investigation uncovered that 

weeks after the bank received almost $9 million in TARP funds, the bank’s president and CEO 

Sean Cutting along with Brian Melland, senior vice president and chief lending officer, allegedly 

began initial disbursements of what would become a $9.5 million fraudulent loan to someone 
SIGTARP - 9

who was a straw purchaser for real estate developer Brian Madjlessi, who was also arrested. The 

loans went into default and were outstanding when the bank failed.

As of December 31, 2014, courts have sentenced 91 defendants investigated by SIGTARP to 

prison (other convicted defendants await sentencing). The complexity and scope of the crimes 

that SIGTARP investigates is reflected in the lengthy prison terms that courts are imposing on 

defendants – the average prison term is nearly double the national average for white-collar crime.

Return on Investment

SIGTARP brings money back to the government by recouping funds lost through TARP-related 

fraud and by preventing personal gain from TARP-related crimes. When a TARP bank fails, all 

TARP funds are lost. To date, 30 TARP banks have failed, and the number may rise. SIGTARP 

has been instrumental in finding evidence that results in bringing criminal charges in cases of 

fraud involving some TARP bank failures. SIGTARP is playing an integral role in bringing back 

the proceeds of crime where the government was a victim. SIGTARP’s investigations have 

resulted in court orders for $7.38 billion to be returned to the government or other victims.

SIGTARP has already assisted in recovering $1.48 billion from its investigations that has been 

paid back to the government or other victims, which is more than 8 times the amount of money 

that had been appropriated to SIGTARP. Of the actual dollars recovered, $1.247 billion was 

returned to the government.

Bank of America — Department of Justice

Actual dollars recovered includes the August 20, 2014, Bank of America $16.65 billion 

settlement with DOJ to resolve civil investigations. The settlement included $1 billion for 

SIGTARP investigations into the origination of defective residential mortgage loans as well as 

the fraudulent sale of the loans to Fannie Mae and Freddie Mac.

The $7.38 billion in court orders resulting from SIGTARP investigations includes $1.27 billion 

that Bank of America was ordered to pay on July 30, 2014, as a penalty to the government. 

SIGTARP uncovered in its investigation that the bank, and its predecessor Countrywide 

Financial Corporation sold a large number of defective mortgages to Government-Sponsored 

Enterprises (GSEs) Fannie Mae and Freddie Mac, originated through a high speed process called 

the “Hustle” (for High Speed Swim Lane) which removed quality control checks that could slow 

down the process. Despite repeated warnings that eliminating these checks could have disastrous 

results, senior management responsible for this program continued it and the GSEs suffered 

significant losses on those mortgages. This case is on appeal, and if the government is successful 

on appeal, the amounts of recoveries will increase.

It takes time to collect on these court orders and often involves seizing personal and real 

property. SIGTARP works to help recover assets that can be used to recover these funds ordered 

by the court. In SIGTARP cases, some of the assets seized include more than 30 properties, 

more than 30 bank accounts, bags of silver, U.S. currency, antique and collector coins, artwork, 

antique furniture such as candelabra, antique cars, luxury cars, and Western Union money orders 

with the “Pay to” line blank. 
SIGTARP - 10

Bank of America (TARP representations) — Part of the recoveries this year from one of 

SIGTARP’s first investigations came from Bank of America paying $15 million to settle a civil 

action by New York’s Attorney General resulting from a SIGTARP investigation into its failure 

to disclose to shareholders losses at Merrill Lynch and false representations to Treasury about 

those losses to receive additional TARP funds. For their roles, former CEO Ken Lewis agreed to 

be banned from serving as an officer or director of a public company for three years and will pay 

$10 million, and former CFO Joseph Price agreed to be banned for 18 months and to pay 

$7.5 million. 

In addition to bringing back money to the government, SIGTARP’s work can result in 

substantial savings to the government. While this is not always easy to track, SIGTARP’s 

investigation of Colonial Bank resulted in an immediate savings to Treasury of $553 million in 

TARP funds that Treasury was prepared to invest in Colonial Bank; SIGTARP stopped the 

money from disbursement given the fraud it had uncovered.

SIGTARP’s law enforcement successes support long-term recovery from the financial crisis by 

restoring public confidence in the financial system and helping end moral hazard by bringing 

consequences to those who break the law. SIGTARP seeks both corporate and individual 

accountability, particularly for senior bank officers who put their banks and the taxpayers’ TARP 

investment at risk. SIGTARP expects a significant number of criminal charges to result from the 

more than 150 ongoing SIGTARP investigations.

Audit

SIGTARP has initiated 37 audits and evaluations and has issued 23 reports. 

This year, SIGTARP raised concerns over increasing number of homeowners falling out of the 

Home Affordable Modification Program (HAMP), and made recommendations to Treasury to 

curb this problem. SIGTARP also raised concerns over 900,000 homeowners whose lowered 

mortgage payment in HAMP will rise after five years and who may need additional help. This is 

a pressing issue, since in a substantial number of cases the five-year period ends during calendar 

year 2015. SIGTARP also noted an alarming increase in the number of homeowners who have 

applied for HAMP but have not received timely decisions because of servicer backlogs. As a 

result, more than 100,000 homeowners are in the backlog and have experienced delays (which 

could be up to one year or more) in the decision about whether they will be accepted in the 

HAMP program.

To educate homeowners and help them avoid becoming victims to mortgage modification fraud, 

SIGTARP recommended that Treasury prominently display all of the information contained in 

the Consumer Fraud Alert: “Tips for Avoiding Mortgage Modification Scams” on the home page 

of websites related to HAMP. As these examples suggest, TARP housing programs continue to 

need significant oversight. As TARP’s housing programs are expected to continue until 2023, 

SIGTARP’s audit work will continue to focus heavily on them.

SIGTARP raised concerns about the small banks and credit unions in the Community 

Development Capital Initiative (CDCI), the failure of some to report to Treasury on TARP funds 

as required, and on their failure to pay TARP dividends. Although the participating institutions 

are small, they play a vital role in serving low-income communities not traditionally served by 
SIGTARP - 11

larger institutions. The banks and credit unions remaining in CDCI continue to face challenges 

that could impact their financial stability, ability to lend to small businesses in their communities, 

and their ability to repay TARP. Community banks continue to have difficulty in gaining access 

to capital. Credit unions have experienced a rise in non-performing loans, which impacts their 

balance sheet and capital. Eight of the remaining CDCI institutions have current enforcement 

actions by their banking regulators. Moreover, many of the CDCI institutions are in 

economically hard-hit areas around the country that are still struggling to recover from the crisis. 

Because of these challenges, it is especially important that Treasury keep a watchful eye on 

taxpayer investments in CDCI institutions. 

Quarterly Reports to Congress

SIGTARP has issued 24 quarterly reports to Congress:

• Describing the activities and plans of SIGTARP; 

• Explaining and evaluating the various TARP programs; 

• Recommending changes to TARP programs and procedures to increase transparency and 

effective oversight and decrease the potential for fraud, waste, and abuse. 

As of September 30, 2014, SIGTARP’s quarterly reports include 151 detailed recommendations 

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

current quarterly report dated October 29, 2014, includes an in-depth discussion on 

recommendations made to Treasury regarding HAMP that have not been implemented.

SIGTARP’s complete listing of recommendations may be reviewed in their entirety 

at http://www.sigtarp.gov/Quarterly%20Reports/October_29_2014_Report_to_Congress.pdf

pages 73-98.

Operating Environment and Key Challenges 

SIGTARP is mandated to carry out its duties until the government has sold or transferred all 

assets and terminated all obligations under TARP. In other words, SIGTARP’s mission, which 

is independent of Treasury’s mission related to TARP, is to remain “on watch” as long as TARP 

assets remain outstanding, which Treasury currently has scheduled until the year 2023. There are 

two types of ongoing TARP programs as illustrated in the table below:

TARP PROGRAM SCHEDULE

TARP Program Scheduled Program Dates

Home Affordable Modification Program (HAMP) 2023 to pay incentives on modifications

Hardest Hit Fund (HHF) 2017 for states to use TARP funds

FHA Short Refinance Program 2020 for TARP-funded letter of credit

TARP INVESTMENTS IN FINANCIAL INSTITUTIONS

TARP Program Remaining Treasury Investment

Capital Purchase Program Remaining principal investments in 34 banks; warrants 

for stock in an additional 34 banks

Community Development Capital Initiative (CDCI) Remaining principal investments in 

66 banks/credit unions

Sources: Treasury, Transactions Report, 9/30/2014; Treasury, Daily TARP Update, 10/1/2014; and Treasury, response to 

SIGTARP data call, 10/6/2014; and FRBNY response to SIGTARP data call, 10/9/2014.

It is anticipated that TARP will continue to be significant past FY 2015. For instance, CDCI is 

expected to continue through 2018, states receiving HHF monies have until 2017 to use TARP 
SIGTARP - 12

funds, and HAMP will continue until 2023. SIGTARP will continue to protect TARP programs 

from fraud, waste, and abuse and promote their efficiency and effectiveness. 

As discussed above, SIGTARP’s investigations and audits do not track when Treasury’s 

participation in the program or investment has ended. Repayment of TARP or exit from TARP 

cannot shield those who commit crime from accountability and justice. The statute of limitations 

for most of the TARP-related crimes investigated by SIGTARP is 10 years from date of 

discovery of the offense. In addition, SIGTARP has conducted several audits to bring 

transparency to historical decision making in TARP based on requests of members of Congress. 

To support ongoing investigations and oversight of multiple TARP programs after FY 2015, 

SIGTARP needs to be fully staffed to carry out its duties in FY 2016 and beyond. 

SIGTARP has always anticipated a surge in investigative work that will continue in the coming 

years, and that has turned into a reality. Several of SIGTARP’s investigations have gone to trial 

in the past year after years of investigative work. With many multi-year long investigations only 

recently resulting in criminal charges, the prosecution can take one or more years. SIGTARP 

has increased its workload to prepare for trials. Additionally, SIGTARP has also recently 

uncovered more crime, with proactive efforts resulting in new investigations. 

The continued success of SIGTARP depends on its staffing. SIGTARP’s total annual request for 

FY 2016 is $40,671,000; 76 percent of which is solely for personnel costs. The effect of a 

reduction in SIGTARP resources directly impacts the country’s recovery efforts as SIGTARP 

would face a reduction in staff that would result in fewer investigations and fewer prosecutions 

that bring accountability and confidence in our judicial system, banking system, and the 

economy. 

As part of its priority to continue the successful pursuit of criminals as a means of restoring 

confidence and recovering from the financial crisis, SIGTARP is seeking ways to ramp up 

staffing levels, despite a number of obstacles experienced over the past fiscal year. SIGTARP 

faces two key challenges with respect to maintaining a fully staffed organization:

• Temporary Agency– SIGTARP is a temporary agency with a challenging responsibility of 

hiring highly experienced personnel. It is difficult to be a choice for applicants when there 

are options to be employed by permanent organizations.

• Transitioning away from no-year to annual funding –SIGTARP’s total spending has 

remained at relatively steady levels since going steady state in FY 2014 as anticipated. 

However, in past years, SIGTARP has been able to use no-year funding provided by 

Congress at SIGTARP’s inception to supplement appropriated funding. But since SIGTARP 

is projected to exhaust no-year funding in 2016, future funding will likely be provided 

entirely through annual appropriations. As a result of this increase in funding uncertainty, 

staff planning has become more challenging.
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Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Special Inspector General for TARP FTE Amount

FY 2015 Enacted 192 $34,234

Changes to Base:

Maintaining Current Levels (MCLs): - $772

Pay-Raise - $306

Pay Annualization - $78

FERS Contribution Increase - $106

Non-Pay - $282

Other Adjustments: - $5,665

Base Funding Shortfall - $5,665

Subtotal Changes to Base - $6,437

Total FY 2016 Base 192 $40,671

Total FY 2016 Request 192 $40,671

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .........................................................+$772,000 / +0 FTE

Pay-Raise +$306,000 / +0 FTE 

Funds are requested for the proposed January 2016 pay-raise and the annualization of the 2015 

pay-raise.

Pay Annualization +$78,000 / +0 FTE 

Funds are requested for annualization of the January 2015 pay-raise. 

FERS Contribution Increase +$106,000 / +0 FTE 

Funds are requested for an increase in agency contributions for Federal Employees Retirement 

System (FERS) employees.

Non-Pay +$282,000 / +0 FTE 

Funds are requested for non-labor costs such as travel, contracts, rent, and equipment.

Other Adjustments ....................................................................................+$5,665,000 / +0 FTE

Base Funding Shortfall +$5,665,000 / +0 FTE 

Funds are requested to meet basic operational requirements. In previous years, operating needs 

were met through a combination of appropriated dollars and no-year funds. SIGTARP 

anticipates its non-earmarked no-year account is projected to be exhausted in FY 2016, and its 

annual appropriation is insufficient to cover SIGTARP’s base operations. A fully funded annual 

appropriation is critical to SIGTARP’s continued success in fulfilling its mandate.
SIGTARP - 14

2.2 – Operating Levels Table

Dollars in Thousands

Special Inspector General for TARP FY 2014 FY 2015 FY 2016

Object Classification Actual Enacted Request

11.1 - Full-time permanent 16,829 20,820 20,318

11.3 - Other than full-time permanent 2,738 2,113 2,780

11.5 - Other personnel compensation 1,726 1,809 2,046

11.9 - Personnel Compensation (Total) 21,293 24,742 25,144

12.0 - Personnel benefits 5,699 6,596 6,710

Total Personnel and Compensation Benefits $26,992 $31,338 $31,854

21.0 - Travel and transportation of persons 897 943 912

23.2 - Rental payments to others 253 236 271

23.3 - Communication, utilities, and misc charges 100 85 115

24.0 - Printing and reproduction 160 161 161

25.1 - Advisory and assistance services 2,612 2,669 2,667

25.2 - Other services 239 520 283

25.3 - Other purchases of goods & serv frm Govt accounts 10,050 9,510 10,969

25.6 - Medical care 75 0 75

25.7 - Operation and maintenance of equip 10 0 58

26.0 - Supplies and materials 378 462 333

31.0 - Equipment 288 231 359

42.0 - Insurance claims and indemnities 140 1 27

91.2 - Unvouchered Expenditures 10 0 10

Total Non-Personnel 15,212 14,818 16,240

Subtotal New Appropriated Resources $42,204 $46,156 $48,094

Budget Activities:

Audit 9,166 12,201 10,266

Investigations 33,038 33,955 37,828

Total Budgetary Resources $42,204 $46,156 $48,094

FTE 165 192 192
SIGTARP - 15

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) [$34,234,000] 

$40,671,000. (Department of the Treasury Appropriations

Act, 2015.)

2C – Legislative Proposals

SIGTARP has no legislative proposals.
SIGTARP - 16

Section 3 – Budget and Performance Plan

3A – Audit

($8,870,000 from direct appropriations): 

The Audit budget activity supports SIGTARP’s priority of coordinated oversight by providing 

recommendations to Treasury to improve TARP programs, bring transparency to decisions made 

in TARP, and prevent fraud, waste, and abuse. SIGTARP conducts, supervises, and coordinates 

programmatic audits of TARP without sacrificing the rigor of required methodology. 

SIGTARP’s audits facilitate transparency and opportunities to improve and protect TARP. 

This activity supports and complements Treasury’s Strategic Goal 1: promote domestic 

economic growth and stability while continuing reforms of the financial system by assessing the 

effectiveness of Treasury’s activities in TARP. In particular, the Audit activity supports 

Objective 1.1: promote savings and increased access to credit and affordable housing options, 

Objective 1.2: wind down emergency financial crisis response programs, and Objective 1.3: 

complete implementation of financial regulatory reform initiatives, continue monitoring capital 

markets, and address threats to stability as they relate to TARP.

Additionally, through open and transparent communication with Congress, the Audit activity 

supports Treasury’s Strategic Goal 5: create a 21st

-century approach to government by improving 

efficiency, effectiveness, and customer interaction. Through expedient responses to inquiries 

from Congress, the Audit activity supports Objective 5.4: create a culture of service through 

relentless pursuit of customer value.

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

adequately and promptly informed of SIGTARP’s oversight and law enforcement activities. To 

fulfill that role, the Special Inspector General and staff meet regularly with Congress and staff. 

In FY 2014 SIGTARP exceeded its performance goal of three “Congressional Requests for 

Testimony Completed,” having completed four testimonies. Additionally, SIGTARP staff 

briefed Congressional staff in April and August on SIGTARP’s April 2014 and July 2014 

Quarterly Reports, respectively. In April, June, and July, the Special Inspector General also 

submitted written Congressional testimony to the U.S. Senate Homeland Security and 

Governmental Affairs Committee and the U.S. Senate Banking Committee on the role of 

oversight of small agencies, the impact of high speed trading on our economy, and what makes a 

bank systemically significant. SIGTARP anticipates that Congress will continue to have interest 

in SIGTARP’s work and will continue to request at least three testimonies in FY 2015.

Copies of written Congressional testimony are posted at www.sigtarp.gov/pages/testimony.aspx.

Description of Performance:

The performance goal, “Number of Completed Audit Products” includes issuing audit products 

that promote the efficiency and effectiveness of the TARP and prevent waste, fraud, and abuse. 

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. Presently there are on-going audits and evaluations some of which 
SIGTARP - 17

have been requested by Congress, and some self-initiated. Among the ongoing audits and 

evaluations in process are reviews of: 

• Treasury’s and the state housing finance agencies’ implementation and execution of the 

Hardest Hit Fund;

• Treasury's role, implementation, and status of the Hardest Hit Fund Blight Elimination 

Program; and

• Treasury's surveys of the recipients of Capital Purchase Program and the Community 

Development Capital Initiative.

SIGTARP exceeded its “Number of Completed Audit Products” target for FY 2014, with 

10 completed audit products. For FY 2015 the target number of audit products is eight, and in

FY 2016, the target is seven in recognition of SIGTARP’s shift of increasing resources to law 

enforcement.

SIGTARP’s complete listing of recommendations may be reviewed in their entirety 

at http://www.sigtarp.gov/Quarterly%20Reports/October_29_2014_Report_to_Congress.pdf

pages 73-98.

In FY 2016 SIGTARP will measure its responsiveness to Congressional inquiries, which 

SIGTARP believes is a more meaningful measure of Congressional interest in SIGTARP’s 

mission than the number of Congressional testimonies submitted. The new measure, 

“Percentage of Timely Responses to Congressional Inquiries” focuses on the responsiveness of 

information flow and transparency between SIGTARP and Congress. SIGTARP’s target of 

responding to Congressional Inquiries Within 45 Days of Receipt of the inquiries 85 percent of 

the time will track SIGTARP’s promptness in providing developments of its oversight activities.

3.1.1 – Audit Budget Activity Budget and Performance Plan

Dollars in Thousands

Audit Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actuals Actuals Actuals Actuals Actuals Enacted Enacted Request

 Appropriated Resources $0 $9,900 $10,581 $14,626 $10,376 $12,220 $9,243 $8,870

Budget Activity Total $0 $9,900 $10,581 $14,626 $10,376 $12,220 $9,243 $8,870

Measure FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Target Target

Congressional Requests for 

Testimony Completed (Units)

9 7 5 4 5 4 3 N/A

Number of Completed Audit 

Products (Units)

3 9 13 13 10 10 8 7

Percentage of Congressional 

Inquiries Responded to within 

45 Days of Receipt

N/A N/A N/A N/A N/A N/A N/A 85.0

Key: DISC - Discontinued and B - Baseline
SIGTARP - 18

3B – Investigations

($31,801,000 from direct appropriations): 

The Investigations budget activity supports SIGTARP’s priority of robust law enforcement of 

crimes and other violations of the law related to TARP. This activity supports and complements 

Treasury’s Strategic Goal 1: promote domestic economic growth and stability while continuing 

reforms of the financial system. In particular, the Investigations activity supports Objective 1.2: 

wind down emergency financial crisis response programs, and Objective 1.3: complete 

implementation of financial regulatory reform initiatives, continue monitoring capital markets, 

and address threats to stability by investigating cases of fraud and abuse related to TARP.

SIGTARP conducts criminal and civil investigations related to TARP using a staff of 

experienced investigators, including special agents, forensic agents, investigators, analysts, and 

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

perspective in detecting and unravelling the most sophisticated of crimes. In the interest of 

maximizing resources, SIGTARP coordinates closely with other law enforcement agencies. In

forming law enforcement partnerships and task force relationships across federal and state 

governments, SIGTARP leverages its unique position and expertise.

Description of Performance:

With the continued success of SIGTARP investigations, its law enforcement partners sometimes

pursue a lead or open a case and then request the involvement of SIGTARP to bring its expertise 

on TARP-related crime. For FY 2014, “Percentage of Cases That are Joint Agency/Task Force 

Investigations” with other law enforcement agencies was 75.5 percent, exceeding the target of 

45 percent. SIGTARP is projecting a goal of 50 percent for FY 2015 and 70 percent for 

FY 2016.

During FY 2014, the “Percentage of Investigations Accepted for Consideration by Prosecutors,” 

including criminal or civil investigations that a federal, state, or local prosecutor has formally 

accepted for consideration for criminal prosecution or civil or administrative action was 

97.5 percent, exceeding the target of 70 percent. This success is directly related to SIGTARP’s 

successful investigation of evidence and its support of prosecutions. The target for this 

performance metric will remain at 70 percent in FY 2015 and increase to 80 percent in FY 2016. 

SIGTARP’s crime-tip Hotline has analyzed more than 34,481 Hotline contacts. “Percentage of 

Hotline Complaints Responded to or Referred for Investigation or Further Action Within 

14 Days of Receipt” was 95 percent for FY 2014, exceeding the annual goal of 70 percent. 

SIGTARP anticipates a 75 percent referral rate of these complaints for FY 2015 and an 

80 percent referral rate for FY 2016. 

During a preliminary investigation, an investigator gathers fundamental information to evaluate 

whether a potential case should be converted to a full investigation or if it should be closed. In 

FY 2014, “Percentage of Preliminary Investigations Converted to Full Investigations Within

180 days” was 95.75 percent, exceeding the target of 60 percent. As SIGTARP has gained 

expertise in investigating TARP-related crime, SIGTARP has efficiently leveraged its resources 

to handle its growing inventory and to expedite these investigations. As SIGTARP’s workforce 
SIGTARP - 19

has evolved, so has its ability to respond quickly to allegations and to devote the necessary 

resources. SIGTARP has involved prosecutors in preliminary investigations to ensure that 

allegations, if proven, will be prosecuted. The result is a greater number of preliminary 

investigations converted to full investigations within the 180-day timeframe. Based on these 

efficiencies, this performance metric will increase to 70 percent in FY 2015 and to 80 percent in 

FY 2016. SIGTARP makes effective, informed decisions when opening preliminary 

investigations. In this manner, SIGTARP will ensure an appropriate commitment of 

investigative resources to support investigations.

3.1.2 – Investigations Budget and Performance Plan

Dollars in Thousands

Investigations Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actuals Actuals Actuals Actuals Actuals Enacted Enacted Request

 Appropriated Resources $0 $13,339 $25,433 $27,174 $29,230 $22,703 $24,991 $31,801

Budget Activity Total $0 $13,339 $25,433 $27,174 $29,230 $22,703 $24,991 $31,801

Measure FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Target Target

Percentage of Cases That are 

Joint Agency/Task Force 

Investigations

60.0 50.0 40.0 65.0 79.0 75.5 50.0 70.0

Percentage of Investigations 

Accepted for Consideration by 

Prosecutors

95.0 100.0 94.0 95.0 94.0 97.5 70.0 80.0

Percentage of Hotline 

Complaints Responded to or

Referred for Investigation or 

Further Action within 14 Days 

of Receipt

77.0 74.0 76.0 77.0 83.0 95.0 75.0 80.0

Percentage of Preliminary 

Investigations Converted to 

Full Investigations within 180 

Days

50.0 80.0 88.0 77.0 82.0 95.75 70.0 80.0

Key: DISC - Discontinued and B - Baseline
SIGTARP - 20

Section 4 – Supplemental Information

4A – Summary of Capital Investments

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 Chief 

Information Officer and Departmental Offices Operations to provide a secure 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. 

SIGTARP’s IT strategy continues with limited IT investments including updates, modifications, 

and maintenance and equipment refreshment, consistent with its role as a temporary agency. For 

FY 2016, 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 has no capital investments.

Non-Major IT Investment Summary

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

modifications of mission essential systems such as hotline information management, 

investigative case management, investigations database, investigations evidence network, 

counsel case management, forensic system management, SIGTARP website and intranet, video 

teleconferencing used primarily for investigative activity with field offices and headquarters, and 

asset management which were established by SIGTARP because they were not provided by 

Treasury. SIGTARP migrated most of these systems to Treasury for hosting services and began 

to use Treasury’s shared services offerings such as cloud computing for content management 

such as document management, Freedom of Information Act tracking, and records management. 

Non-IT Investment Summary

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

Division requires specialized surveillance equipment in order to conduct criminal investigations 

in cooperation with other federal/state/local law enforcement agencies. This specialized 

equipment ensures agent safety to obtain evidence for prosecution while allowing 

interoperability with equipment used by the other agencies. Capital Investments

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded 

at: http://www.treasury.gov/about/budget-performance/Pages/summary-of-capitalinvestments.aspx

This website also contains a digital copy of this document.