Magazine article American Banker

Former NOVA Bank CEO Sentenced for Tarp Fraud

Magazine article American Banker

Former NOVA Bank CEO Sentenced for Tarp Fraud

Article excerpt

Byline: Joseph Kellard

The former chief executive of NOVA Bank in Berwyn, Pa., will serve more than two years in a federal prison for his role in a fraud scheme involving the Treasury Department's Troubled Asset Relief Program.

Brian Hartline, 51, was sentenced Monday to 14 months in prison for defrauding $13.5 million from Tarp. Hartline was also fined $50,000 by Pennsylvania U.S. District Judge Darnell Jones.

In April a jury in federal court in Philadelphia found Hartline and former NOVA Chairman Barry Bekkedam, 48, guilty of conspiracy to defraud, Tarp fraud and two counts of making false statements to the federal government. Bekkedam will be sentenced in January.

Hartline, Bekkedam and other investors established NOVA Bank in 2002. Bekkedam, who also owned and operated the financial advisory company Ballamor Capital, was the chairman of the bank's holding company until 2007.

According to federal prosecutors, NOVA Financial Holdings applied for roughly $13.5 million in funds through Tarp as the bank faced the risk of failure in 2008 as a result of bad loans and investments. NOVA received approval for Tarp funds in June 2009 on the condition that the bank raise $15 million of additional, private capital. Hartline and Bekkedam were accused of making circular transactions to give the appearance that the bank had the funds necessary to qualify for Tarp.

"As part of the scheme, the defendants arranged for NOVA Bank to loan money to G. …

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