The Troubled Assets Relief Program, or TARP, began as a reaction to the financial crisis of the United States in 2008 with the signing of the Emergency Economic Stabilization Act of 2008. TARP funds were originally meant to buy up mortgage assets and similar financial liabilities from the failing banking industry, saving the largest bank groups in the United States from collapsing. However, shortly after being implemented, this program expanded to include several other measures to promote corporate growth around the country. With this expansion came more openings for unscrupulous companies to defraud the federal government.
One of the largest portions of TARP funding became the Capital Purchase Program, or CPP. This program offered companies the option to buy preferred stocks from the government to stimulate economic growth. In practice, preferred stocks work as type of debt. The government opens a purchasing program through the CPP with the expectation that these corporations will pay back the government whatever money they have taken. Dividends from preferred stocks are not tax-deductible for corporations, but sometimes receive priority on dividends. Preferred stock usually does not come with corporate voting rights either.
Although the Capital Purchase Program was a voluntary system, there were still several agreements or qualifications for a company to work within the program. While the goal of this program was to supplement the rescue efforts of the TARP funds, some CPP money has fallen prey to fraudulent dealings, costing taxpayers a great deal of money.
In particular, the most problematic instance of fraud for this program involves the repayment of these preferred stock purchases. This money was meant to stimulate the flow of capital through a business, recharging the otherwise halting United States economy. However, if a company illegally modifies their records or takes action to change some part of the purchasing agreement between them and the government, the resulting fraud comes at the taxpayers' expense. This can result in greedy companies getting away with keeping millions of dollars that they were supposed to pay back to the government.
If you have any information regarding fraudulent actions taken against the federal government through a TARP subprogram such as the Capital Purchase Program, you may be eligible to pursue a suit through the False Claims Act. The False Claims Act allows for whistle blowers to receive protection as well as a portion of the funds recovered from the party who defrauded the government.
One of the largest portions of TARP funding became the Capital Purchase Program, or CPP. This program offered companies the option to buy preferred stocks from the government to stimulate economic growth. In practice, preferred stocks work as type of debt. The government opens a purchasing program through the CPP with the expectation that these corporations will pay back the government whatever money they have taken. Dividends from preferred stocks are not tax-deductible for corporations, but sometimes receive priority on dividends. Preferred stock usually does not come with corporate voting rights either.
Although the Capital Purchase Program was a voluntary system, there were still several agreements or qualifications for a company to work within the program. While the goal of this program was to supplement the rescue efforts of the TARP funds, some CPP money has fallen prey to fraudulent dealings, costing taxpayers a great deal of money.
In particular, the most problematic instance of fraud for this program involves the repayment of these preferred stock purchases. This money was meant to stimulate the flow of capital through a business, recharging the otherwise halting United States economy. However, if a company illegally modifies their records or takes action to change some part of the purchasing agreement between them and the government, the resulting fraud comes at the taxpayers' expense. This can result in greedy companies getting away with keeping millions of dollars that they were supposed to pay back to the government.
If you have any information regarding fraudulent actions taken against the federal government through a TARP subprogram such as the Capital Purchase Program, you may be eligible to pursue a suit through the False Claims Act. The False Claims Act allows for whistle blowers to receive protection as well as a portion of the funds recovered from the party who defrauded the government.