San Ramon Man Facing Criminal Charges in Case of Failed United Commercial Bank

Two former executives of a failed bank that received $300 million in federal bailout monies before its collapse face criminal and civil fraud charges for their part in attempting to hide the bank's losses.

Ebrahim Shabudin, 63, of Moraga, and Thomas Yu, 48, of San Ramon, were the former chief operating officer and first vice president at San Francisco-based United Commercial Bank, which failed in 2009 despite receiving $298 million in Troubled Asset Relief Program (TARP) funds.

Both men face four criminal counts, according to an indictment unveiled in Federal Court Tuesday. Neither Shabudin nor Yu entered a plea during their appearance before a U.S. magistrate, and each was released on $500,000 bond.

UCB was the ninth-largest bank to fail during the country's financial crisis and catered chiefly to California's Asian community. It was regarded as a successful banking institution until it was closed by regulators in 2009.

"Shabudin and Yu are the first senior executives of a TARP bank charged in connection with a scheme to defraud investors, which included the Treasury, and by extension the American taxpayer," Acting Special Inspector General for TARP Christy Romero said Tuesday. "The bank failed and none of the $298 million in TARP funds have been repaid..."

A Reuters correspondent on hand for Tuesday's hearing reported that Shabudin was led down a hallway in the San Francisco federal courthouse, the last in a line of shackled prisoners. The Moraga man, who told the magistrate Tuesday he was currently working as a consultant for Capco, was the only detainee in line not wearing a prison jumper.

Yu, who appeared in a suit, was not detained during his court appearance.

Assistant U.S. Attorney Adam Reeves characterized the case against the two men as "an ongoing criminal investigation."

Shabudin's lawyer James Lassart declined to comment after the court hearing, according to Reuters Yu's lawyer George Cotsirilos Jr. was not immediately available for comment.

Yu and Shabudin are scheduled to be arraigned in court on Oct. 20.