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Former TierOne Bank CEO and president agree to garnishment of millions of FDIC money
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Former TierOne Bank CEO and president agree to garnishment of millions of FDIC money

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TierOne Bank

Great Western Bank took over TierOne after the Lincoln bank failed in June 2010.

The former CEO of TierOne Bank has agreed to a $2,345,605 garnishment to pay off the restitution and fine he owes in a criminal case for a scheme to conceal losses on real estate loans from regulators and shareholders, which ultimately led the bank to fail in June 2010.

Gilbert Lundstrom is serving an 11-year prison sentence on house arrest after being convicted at trial of 12 counts, including wire fraud, securities fraud and falsifying bank records.

Gilbert Lundstrom

Gilbert Lundstrom

Last month, federal prosecutors asked the court to make his restitution due right away, rather than in monthly installments.

Assistant U.S. Attorney Amy Blackburn said the government had learned that the FDIC paid Lundstrom, as receiver for the bank, $481,697 in unpaid retirement plan benefits and still owes him $2,748,561, plus interest.

While he was current on his $2,500 monthly payments, he still had sizable fine and restitution balances. As of July 26, Lundstrom still owed $2,341,721, which includes a fine of $1.2 million. 

For that reason, she sought to block the FDIC from disbursing the $2.7 million and a judge's order for the FDIC to pay funds owed to Lundstrom to the clerk of the court. 

In July, Blackburn called Lundstrom's receipt of the money in October and failure to inform the court "deceitful," adding that, in theory, he could spend or transfer the money to try to avoid paying restitution. 

But Lundstrom's attorney later said that he had acknowledged the claims to the U.S. Probation Office in 2015. 

In a stipulation that followed, Lundstrom agreed that the money still owed by the FDIC should be applied to the restitution he owes and asked the judge to make restitution due immediately. 

James Laphen, the former bank president who also was convicted in the plot, agreed to the same. He still owed $1,341,721, including a fine of $200,000.

James Laphen

James Laphen

The United States served a writ of garnishment on the FDIC late last month, to which the FDIC responded this week. 

Both Lundstrom's and Laphen's restitution obligations are expected to be satisfied after the FDIC pays the money due to them, with interest. They would receive any amount that remains due to them after that. 

Reach the writer at 402-473-7237 or

On Twitter @LJSpilger



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