Former trader charged with defrauding bailout fund

"As most Americans tried to keep their heads above water during the financial crisis, Jesse Litvak is charged with trying to profit from the taxpayer-funded bailout known as TARP," said Special Inspector General for TARP Christy Romero. "The charges paint a picture of Litvak shamelessly lying to dupe the government into overpaying for mortgage securities with bailout funds."

The indictment charges Litvak with 11 counts of securities fraud, which carry up to 20 years in prison on each count, one count of TARP fraud, which carries a maximum term of imprisonment of 10 years, and four counts of making false statements, which each carry a maximum prison term of five years if convicted.