Category Archives: China

Example: Depths of Chinese Hacking the U.S.

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Former Top FBI Lawyer and Counterintelligence Official Admits Chinese Hacked His Home Computer

September 8, 2015

China Allegedly Hacked Top Former FBI Lawyer 

Jeff Stein, Newsweek

Marion “Spike” Bowman, a top former FBI lawyer and U.S. counterintelligence official who heads an influential organization of retired American spies, says a hacker from China penetrated his home computer, beginning with an innocent-looking email last spring.

“It was an email supposedly from a woman in China, and I exchanged correspondence with her a couple of times,” says Bowman, who was deputy general counsel to three FBI directors between 1995 and 2006. “She sent me a document that a friend of hers had supposedly written, in English, and wanted my opinion on it,” he tells Newsweek. She also sent him her picture.

“I never got around to replying, so I never heard from her again,” says Bowman, who went on to become deputy director of the National Counterintelligence Executive, which is tasked with developing policies to thwart foreign spies and terrorists.

But then, a week ago, he says, he got another message from China via his email account at George Washington University, where he has lectured on national security law since 2003.

“It was apparently from a university in China asking me come to speak at a conference on the environment”—not even remotely one of his areas of expertise, Bowman says. He called the FBI.

After a forensic examination of his machine, the FBI told him “they had found a malware type that’s designed to find out what’s on my computer,” Bowman says. “It wasn’t anything to infect it.” Still, just being able to read the contents of a target’s computer can reveal lots of valuable information like emails and documents, contact files with phone numbers and other personal data, like home addresses.

“Somebody who really knows what they’re doing” can wreak havoc, he says.

The FBI didn’t tell him exactly who was behind the hack, he says, “but they think they identified the woman” in a picture she sent along with one of her emails last spring. “It was somebody that they knew,” Bowman says. “I didn’t inquire any further.”

Before joining the FBI, Bowman was a Navy lawyer assigned to advise SEAL teams on clandestine operations, among other sensitive matters. His portfolio at the FBI gave him intimate knowledge of the details of operations to counter threats from foreign spy agencies.

“I still carry lots of deep Cold War secrets in my head,” he says, although not on his computer. But he is still very active in national security circles as chairman of the board of directors of the Association of Former Intelligence Officers, an organization with several thousand members nationwide, about half of them former CIA personnel.

Bowman’s revelation follows several months of bad news about the vulnerability of government computers to foreign hackers, the latest being a report published Monday saying that Chinese and Russian intelligence agencies are “aggressively aggregating and cross-indexing hacked U.S. computer databases” to catch American spies working overseas. China-based hackers breached about 22 million files held by the federal Office of Personnel Management, officials say.

“At least one clandestine network of American engineers and scientists who provide technical assistance to U.S. undercover operatives and agents overseas has been compromised as a result” of the Russian and Chinese exploitation of the files, the Los Angeles Times reported, citing two U.S. officials.

The story, Bowman says, was “pretty much on target.”

*** It obviously is much worse than we know for the Obama administration to sign off on a sanction and or other consequence ahead of the Xi’s visit to the United States next week.

U.S. may punish Chinese hacking before Xi’s visit

Imposing sanctions before this month’s summit could derail other priorities.

Top government officials are floating the idea of retaliating within the next week to Chinese cyberattacks, possibly by imposing targeted sanctions on some officials and firms, people familiar with the discussions say. But outside experts say it would be wiser to wait until after this month’s White House summit with Chinese President Xi Jinping.

“I heard from one person that it could be as early as next week,” Jim Lewis, director of the Center for Strategic and International Studies’ Strategic Technologies Program, told POLITICO. He added, “I still think it would be best to wait for the summit.”

Calls for U.S. retalation to Chinese hacking have risen to a furor since the China-linked breach of highly sensitive security clearance forms from 21.5 million current and former federal employees, disclosed in June.

But imposing sanctions before the late-September summit would risk derailing a serious conversation on cyber issues along with myriad other topics, including China’s economic troubles, Chinese belligerence in the South China Sea and cooperation on climate change.

Some China watchers even suspect that the White House is trying to improve its bargaining position in advance of the summit by floating the possibility of sanctions in a serious way.

“My sense is that they’re floating the idea to try to create some kind of leverage in the meetings,” said Adam Segal, a China scholar and director of the Digital and Cyberspace Policy Program at the Council on Foreign Relations.

If the White House did impose sanctions before the meeting, it would be deeply embarrassing to the Chinese and to Xi personally and risk the Chinese doing something to downgrade the summit’s importance, Segal said. “I think if they’re going to do it before the summit, they’ve got to be prepared for the summit to really take a downward turn,” he said.

Business leaders are also dubious about imposing sanctions before Xi’s visit.

The White House should use the summit “as an opportunity to engage in effective dialogue on the cyber issue. If sanctions jeopardize that opportunity, we’d rather see them put it off,” the leader of a major industry organization said in an interview, speaking without attribution because he was speculating about government policy.

If the White House ultimately imposes targeted sanctions, the association leader added, the sanctions should be “based on transparent, credible evidence that’s legally sound.” They should also be designed with a clear path forward that, ultimately, leads to fewer China-linked cyberattacks, he said.

“Most business executives we’ve spoke with felt the indictments against Chinese PLA officers didn’t meet that test,” he added, referring to the May 2014 U.S. indictments of five hackers employed by China’s People’s Liberation Army. That was the Obama administration’s most significant diplomatic strike against Chinese hacking to date.

“[The indictments] didn’t seem to advance anything and they seemed to increase tension rather than reduce it around the issue,” the official said.

In the wake of the OPM hacks, some political leaders have called for much more belligerent responses to Chinese hacking. They include GOP White House contenders Mike Huckabee, who has urged the U.S. to hack back against the communist nation, and Wisconsin Gov. Scott Walker, who has suggested canceling the Obama-Xi summit entirely.

But even cyber hawks warned that aggressive action could backfire in advance of the summit.

“I think everything is going to basically be on hold until the Iran deal goes through and until after President Xi comes to meet with [President Obama],” said Rep. Dutch Ruppersberger (D-Md.), who was formerly ranking member on the House Intelligence Committee.

Ruppersberger added that “we have to eventually draw a line on cyberattacks,” and that the U.S. bargaining position relative to China may be improved now because of the tailspin in the Chinese stock market and other financial difficulties.

The White House has routinely declined to speak publicly about the possibility of sanctioning China for cyberattacks or any more forceful follow-up to the PLA indictments. Press secretary Josh Earnest has said several times that Obama plans to raise cyber concerns with Xi during their summit.

“There’s no doubt that the president will certainly raise, as he has in every previous meeting with his Chinese counterpart, concerns about China’s behavior in cyberspace,” Earnest said during an Aug. 26 news conference.

White House officials have determined they must respond to China’s hacking of OPM, but have been debating for months what the appropriate response should be and when to impose it, Lewis said.

The option of targeted cyber sanctions, which Obama created by executive order in April, has long been on the table along with additional indictments or some form of diplomatic protest, he said.

White House officials have fingered China for the OPM hack anonymously but have not done so, thus far, on the record.

A forceful response to the OPM hack and to Chinese theft of U.S. companies’ intellectual property and trade secrets has also been delayed by more pressing diplomatic priorities, Lewis said, including securing Chinese cooperation for a deal to halt Iran’s nuclear weapons program

“This administration has done more than any other on cybersecurity, but, in a lot of cases, it ends up being No. 2 because of the need to get agreement on other things,” Lewis said. “Cyber always ends up coming in second place, particularly when it comes to China.”

 

 

 

 

 

Congress: Islamist Terror Threat Matrix

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U.S. Terror Matrix

 

 

 

The full House of Representatives 8 page report is here.

 

KEY TAKEAWAYS

• The jihadist threat in the U.S. homeland is high and has escalated dramatically this year. There have been more U.S.-based jihadist terror cases in 2015 than in any full year since 9/11. The number of U.S. terrorist cases involving homegrown violent jihadists has gone from 38 in July 2010 to 124 today—more than a three-fold increase in just five years.

• ISIS is fueling the Islamist terror wildfire across the globe at unprecedented speed. As of the end of August, the group has inspired or directed 57 terror attack plots against Western targets, including 15 in the United States. A recent train attack in France would have been a mass-casualty attack had it not been for an alert group of Americans. There have now been nearly twice as many ISIS-linked attack plots against the West this year (37) as there were in all of 2014 (20).

• Islamist terrorists are intent on killing American law enforcement and military personnel, in addition to innocent civilians. Radicals are increasingly targeting men and women in uniform here in the United States. In August, ISIS supporters released another “hit list” of American government personnel, including service members. Since early 2014, the majority of Islamist terror plots on U.S. soil have featured plans to kill police or U.S. service members.

• ISIS has largely maintained its terror safe havens in Syria and Iraq while expanding globally more than a year after the U.S. and its allies launched operations against it. Al Qaeda affiliates from Syria to Yemen have also carved out sanctuary and seized additional terrain. ISIS retained control over its major strongholds in Syria and Iraq while undertaking disruption attacks and offensives in key territory; ISIS-affiliated militants have simultaneously consolidated control in Libya. Foreign fighters continue to swell the ranks of Islamist extremist groups looking to recruit foot soldiers and activate followers to launch attacks in their home countries.

HOMEGROWN ISLAMIST EXTREMISM

The jihadist threat in the U.S. homeland is high and has escalated dramatically this year.

By the numbers

• Since September 11, 2001, there have been 124 U.S. terrorist cases involving homegrown violent jihadists. Over 80 percent of these cases—which include plotted attacks and attempts to join foreign terrorist organizations—have occurred or been disrupted since 2009.1

 

• Authorities have arrested or charged at least 52 individuals in the United States this year – 67 since 2014 – in ISIS-related cases. The cases involve individuals: plotting attacks; attempting to travel to join ISIS overseas; sending money, equipment and weapons to terrorists; falsifying statements to federal authorities; and failing to report a felony.2

• FBI Director James Comey has said authorities have hundreds of open investigations of potential ISIS-inspired extremists that cover all 56 of the bureau’s field offices in all 50 states. He stated there may be hundreds or thousands of Americans who are taking in recruitment propaganda over social media applications: “It’s like the devil sitting on their shoulders, saying ‘kill, kill, kill.”

Recent Developments

• August 24: Ahmed Mohammed El Gammal, 42, was arrested in Avondale, Arizona, for helping a 24-year-old New York City resident travel to Syria to receive military training from ISIS. El Gammal was an avid ISIS supporter online and engaged the recruit through social media before in-person meetings. El Gammal and the recruit communicated with an unnamed co-conspirator based in Turkey.

TERROR PLOTS AGAINST THE WEST

ISIS is fueling the Islamist terror wildfire across the globe at unprecedented speed.

By the numbers

• Since early 2014, there have been 57 planned or executed ISIS-linked terror plots against Western targets, including 15 inside in the United States.3

• There have been nearly twice as many ISIS-linked plots against Western targets in the first seven months of this year (37) than in all of 2014 (20).4

Recent Developments

• August 21: A 25-year-old Moroccan national, Ayoub El Khazzani, attacked passengers on a train in Thalys, France, before a group led by three Americans, including two service members on vacation, subdued him. Khazzani was armed with an arsenal of weapons and 270 rounds of ammunition. He watched a jihadist propaganda video before attempting to launch his attack. He had lived in and attended a radical mosque in Spain before relocating to France. He had also lived in Belgium and traveled from Germany to Turkey in early May before returning to Europe in June. This trip was reportedly part of a plot to fight with ISIS in Syria.

• August 13: ISIS’s “hacking division” released information regarding 1,400 American government personnel, including service members, and encouraged supporters to track down and attack them. The list included names, e-mail addresses, and phone numbers. ISIS operative and hacker Junaid Hussain had been central to similar plots targeting servicemembers; Hussain was eliminated in an August 24th drone strike in Syria.

FOREIGN FIGHTERS

Undeterred by airstrikes, foreign fighters continue to pour into the conflict zone in Syria and Iraq, bolstering ISIS and representing a potential threat to their home countries—including America—upon return.

By the numbers

• More than 25,000 fighters from 100 countries have traveled to Syria and Iraq to join extremists—the largest convergence of Islamist terrorists in world history. U.S. estimates reportedly put its current manpower at 20,000-30,000 members. “We’ve seen no meaningful degradation in their numbers” since last August, according to a defense official.

• Approximately 4,500 Western fighters have traveled to Syria and Iraq.5 Europol recently assessed that the high-end estimate of EU citizens who left to fight in Syria may have been as high as 5,000 at the beginning of this year.

• An estimated 550 Western women have traveled to the conflict zone.

Read the whole report here.

 

 

China Russia Military Parade, During Economic Spiral

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In part LATimes: President Xi Jinping announced Thursday that China will cut its military by 300,000 troops, a significant reduction in one of the largest militaries in the world and a move that the Chinese leader called a gesture of peace. China’s ruling Communist Party staged a massive military parade in central Beijing, sending a stream of goose-stepping troops, tanks, and ballistic missiles down a major east-west thoroughfare as fighter jets zoomed overhead trailing multicolored smoke.

Xi’s speech kicked off the parade — officially called the “Commemoration of the 70th anniversary of the Victory of Chinese People’s Resistance Against Japanese Aggression and World Anti-Fascist War.”

An estimated 12,000 troops – about 1,000 of whom hailed from Belarus, Cuba, Tajikistan, and other countries – marched along the 10-lane Changan Avenue from the commercial center Wangfujing to Tiananmen Square, about 1.5 miles away. They were joined by 200 fighter jets and 500 pieces of military hardware, including tanks and ballistic missiles.

Representatives from 49 countries were in attendance, including Russian leader Vladimir Putin, South Korean President Park Geun-hye and U.N. Secretary General Ban Ki-moon.

Rory Medcalf, head of the national security college at Australian National University, said that Beijing may have decided to cut 300,000 troops “in the name of efficiency and cost saving so that the defense budget can be reallocated to 21st century capabilities.” More here.

The friendship between Russia’s Putin and China’s Xi is becoming strained

BEIJING: They have met more than a dozen times and stood shoulder to shoulder during Thursday’s military parade here. But the once-vaunted relationship between the Chinese president, Xi Jinping, and Russia’s leader, Vladimir Putin, has come under strain as the economies of their countries have faltered.

Two landmark energy deals signed last year for Russian natural gas to flow to China have made little progress and were barely mentioned when the two men met for talks after watching the show of weapons Thursday on Tiananmen Square. The bilateral trade that was predicted to amount to more than $100 billion this year instead reached only about $30 billion in the first six months, largely because of a reduced Chinese demand for Russian oil.

Putin has enjoyed basking in the stature of Xi, who leads one of the world’s largest economies. But with the recent stock market turmoil in China and the slowest economic growth in a quarter-century, Beijing will be unable to provide the ballast Putin has sought against economic sanctions imposed on Russia by Europe and the United States after its annexation of Crimea, not to mention plummeting oil prices worldwide.

“Russia was dependent on China growing and driving the demand for its commodities: oil, gas and minerals,” said Fiona Hill, a Russia specialist at the Brookings Institution in Washington. “China was an alternative to Europe.”

The linchpin of the relationship between Xi and Putin was a May 2014 accord on a 30-year deal for China to buy natural gas from fields in Eastern Siberia, for a reported $400 billion with first delivery between 2019 and 2021. During the signing in Shanghai, Putin bragged that the deal was an “epochal event,” and expressed relief that Russia, under pressure from European sanctions, would be able to diversify its gas sales. More details here.

Analysts: Beijing Parade a ‘Bazaar’ of Stolen Technology

Saibal Dasgupta, Voice of America

The massive military parade in Beijing this week showcased China’s latest weapons, unveiling many to the public for the first time. But weapons experts say the systems on display showed hallmarks of China’s reputation for stealing technology and adapting it to its requirements.
 
The show involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft. The Chinese government said that all the equipment had been made indigenously, attesting to the success of the country’s military industrial capability and the estimated $145 billion spent on the military in 2015.

“The parade was a bazaar of stolen intellectual property,” said Michael Raska, senior fellow at the Singapore-based Institute of Defense and Strategic Studies.

The researcher said it is possible to identify components and designs in different equipment, which have been sourced from other countries in a dubious manner.

Cloned Technology

Citing a specific example, Raska said, “The HQ-6A launchers that we saw at the parade are based conceptually on the cloned Italian Alenia Aspide missile, itself which is based on the US RIM-7E/F Sparrow.”

Raska said the Chinese J-15 naval fighter is based on adaptation of Russia’s Sukhoi Su-33.
 
The United States has repeatedly accused China in recent years of cybertheft of U.S. technology and weapons systems on a grand scale. U.S. defense contractors have alleged that China’s J-31 stealth fighter is largely based on stolen technology of the U.S. F-35.

The United States last year said that Chinese army hackers had stolen trade secrets from six U.S. nuclear, steel and clean-energy companies, directly resulting in “substantial” loss of jobs, competitive edge and markets.
 
“This is a case alleging economic espionage by members of the Chinese military… to advantage state-owned companies and other interests in China,” then-U.S. Attorney General Eric Holder said.

But Raska said China has passed the stage where they were “emulators and copiers” and reached what experts describe as the point of “IDAR,” which means identify, digest, absorb and reinvest technologies.
 
Mix-and-Match

Analysts said it is not easy for countries and companies that produced an original technology to prove that it was stolen by China. Component designs are mixed and matched across different categories of weapons before they are remodeled and manufactured in China.
 
China may also be using its diplomatic relationships with countries that have acquired Western weapons and do not mind passing on acquired technologies to Chinese scientists.
 
But even with such technology sharing from countries friendly with China, Jagganath Panda, a research fellow at the Institute of Defense Studies and Analysis, said the country’s investments in its military have paid off.

“We need to accept that China has been hugely successful in developing a strong military industrial production capability,” he said.
 
In recent years China has sold drones, warships, submarines and air defense systems to developing countries, becoming the world’s third largest arms exporter behind the United States and Russia.
 
Indeed, one major point of Thursday’s military parade may have been to display the country’s newest advanced systems to interested buyers, and bolster China’s reputation as an emerging military power.

Soros and China vs. M1A1’s and F-35’s: Irregular Warfare

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A kinder, gentler weapon, software, economic terrorism and exploiting weakness. What the U.S. military knows and what government leaders know but find difficult to defeat, IRREGULAR WARFARE.

The main protagonist in this section of the history book will not be a statesman or a military strategist; rather, it will be George Soros. Of course, Soros does not have an exclusive monopoly on using the financial weapon for fighting wars. Before Soros, Helmut Kohl used the deutsche mark to breach the Berlin Wall–a wall that no one had ever been able to knock down using artillery shells [see Endnote 13]. After Soros began his activities, Li Denghui [Li Teng-hui 2621 4098 6540] used the financial crisis in Southeast Asia to devalue the New Taiwan dollar, so as to launch an attack on the Hong Kong dollar and Hong Kong stocks, especially the “red-chip stocks.” [Translator’s note: “red-chip stocks” refers to stocks of companies listed on the Hong Kong stock market but controlled by mainland interests.] In addition, we have yet to mention the crowd of large and small speculators who have come en masse to this huge dinner party for money gluttons, including Morgan Stanley and Moody’s, which are famous for the credit rating reports that they issue, and which point out promising targets of attack for the benefit of the big fish in the financial world [see Endnote 14]. These two companies are typical of those entities that participate indirectly in the great feast and reap the benefits.

Soros pours out all his bitterness in his book, The Crisis of Global Capitalism. On the basis of a ghastly account of his investments in 1998, Soros analyzes the lessons to be learned from this economic crisis.

When it comes to the axiom, Know Thy Enemy, China has made an art of this objective. China does so by any means possible with notable success.

In 1999, China used analysts to understand their adversaries such that the primary mission was to achieve a wide set of competitive edges, all under the ethos of ‘Unrestricted Warfare’.

Going beyond the common air or ground war operations, there are countless other methods to gain advantage or defeat others in a competitive world.

A 200 page essay published in 1999 came to the attention of U.S. military leaders. It is a compelling read and germane to conflicts today and well into the future.

Unrestricted Warfare  by Qiao Liang and Wang Xiangsui 

Qiao Liang is a Chinese Air Force Major in the People’s Liberation Army and co-authored a book titled  ‘Unrestricted Warfare’. The scope of the book is China’s Master Plan to Destroy America.

Meanwhile, if you can stand more, there is Russia. The two countries are using the very same software warfare tactical playbook and it too has not gone unnoticed.

EU sets up unit to counter Russia’s disinformation campaigns

Janes: The EU announced on 27 August that it is forming a small “rapid response” team of officials within the European External Action Service (EEAS) to deal with Russian propaganda.

To be launched on 1 September, the team will monitor Moscow’s propaganda manoeuvres and advise EU and national authorities and their media campaigns accordingly, said EU officials.

The move comes in response to a request in March by EU leaders to Federica Mogherini, the EU’s chief of foreign and security policy, to mount a response to “Russia’s ongoing disinformation campaign”.

The team will be comprised of 8-10 Russian-speaking officials from Sweden, the UK and other countries within the EEAS, the EU’s foreign policy wing.

***

The Cyber War: As tension between the United States, Russia and China continues to escalate, reports of cyber warfare between the nations has become increasingly prominent. Modern warfare can be waged in numerous ways, and it seems that this virtual form of conflict will be an increasing theme as the 21st century develops.

 

The cyber warfare between the United States, Russia and China is part of an overall epoch-defining conflict between the three nations. This is largely based on economic disagreement and rivalry, but has also spilled over into military and territorial disputes as well. Although this war has remained physically peaceful thus far, the potential for future conflict between the three nations remains significant. And with the likes of Edward Snowden revealing the extent of government snooping, we can expect more reports of governmental cyber attacks in the future.

 

Meet Criminal Ebrahim Shabudin Costs Taxpayers Millions

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Securities and Exchange Commission v. Thomas S. Wu, Ebrahim Shabudin, and Thomas T. Yu 

Exec at center of first TARP bank failure gets 8 years in prison

Fraud scheme cost taxpayers more than $300 million

More from Drew Harwell at the Washington Post: In 2009, less than a year after its $300 million taxpayer-funded rescue, the United Commercial Bank burned through the cash to become America’s first bailout-boosted bank to fail during the financial meltdown.

But this week, one of the imploded bank’s former senior executives was sentenced to eight years in prison for covering up its collapsing loans, becoming one of the few high-ranking bankers to face punishment for crisis-era crimes.

Ebrahim Shabudin, a former chief credit officer for the San Francisco-based bank, falsified records to hide major loan losses from auditors and investors in what prosecutors called a “delay-and-pray” scheme, even as the bank sought and pocketed cash from the Troubled Asset Relief Program, or TARP.

The bank, which once managed nearly $11 billion in assets and ran more than 50 branches across the United States, China and Taiwan, became the ninth largest to fail since 2007 even with help from the multitrillion-dollar bailout. Its dramatic failure cost the federal fund that insures Americans’ deposits more than $675 million.

The bailout’s chief watchdog called the years-long investigation into Shabudin “one of the most significant prosecutions” for crimes in the shadow of the financial meltdown. In March, after a six-week trial, a federal jury convicted Shabudin, 66, of seven counts of conspiracy and corporate fraud, making him one of the rare high-level bankers to head to court due to crisis-era crimes.

“Shabudin had every opportunity to do the right thing, but he was motivated instead to preserve the bank’s reputation at all costs, even if it meant committing a crime,” said Christy Goldsmith Romero, the special inspector general for TARP. “He was essentially gambling with taxpayers’ bailout dollars, and it was taxpayers who ultimately lost.”

But his sentencing may do little to quiet criticism that few big fraudsters have been punished in the meltdown’s long aftermath. The watchdog has secured convictions against 200 bank officers and other officials, but most were involved in smaller community banks, not Wall Street titans like those that used taxpayer money to pave over bad bets or dole out big bonuses.

Originally specializing in lending to Chinese Americans, the bank grew aggressively through commercial real-estate loans, becoming the first U.S. financial institution to buy a Chinese bank.

Its high-risk lending nearly doubled the bank’s loan portfolio between 2004 and 2007, to more than $8 billion, and made a rising star of chief executive Thomas Shiu-Kit (“Tommy”) Wu, who in 2006 was named auditing giant Ernst & Young’s financial-services Entrepreneur of the Year.

But as the bank’s river of risky loans began to fail, Shabudin and Wu held off on downgrading loans they knew were falling apart, ordered subordinates to understate the bank’s losses by at least $65 million, and blasted out false information in press releases, earning calls and annual reports.

Federal watchdogs including from the Federal Reserve, the Consumer Financial Protection Bureau and the FBI joined the case, making Shabudin and bank senior vice president Thomas Yu the first senior bank officials charged with fraud at a bailout-boosted financial institution.

Shabudin was the bank’s third officer to be criminally convicted, after Yu and chief financial officer Craig S. On pleaded guilty to conspiracy charges late last year. An outstanding warrant is in place for Wu, the chief executive, who has not yet been apprehended.

[SIGTARP proves that some bankers aren’t too big to jail]

Though credited with helping stabilize the wobbling economy, the bailout is remembered by many for its corporate largesse, including the hundreds of millions of dollars in bonuses paid to the heads of failing banks rescued by taxpayer cash.

Yet many of SIGTARP’s cases have focused on brazen acts of accounting fraud and smaller banks’ misspent millions. In one case, the executive of Mainstreet Bank, a community bank in Missouri, used nearly $400,000 of the bank’s $1 million bailout to buy a waterfront Florida condo.

The first person convicted of stealing bailout funds, Charles Antonucci, pleaded guilty in 2010 to bribes, fraud and embezzlement while serving as president of the Manhattan-based Park Avenue Bank. He was sentenced last month to 30 months in prison, down from a potential maximum of 135 years, because prosecutors said he cooperated with the bank probe.

William K. Black, a former bank regulator and University of Missouri associate professor specializing in white-collar crime, said Shabudin’s role in only the ninth-largest bank failure highlights the failure of regulators to combat larger frauds.

The Justice Department has still “prosecuted no banking leader for leading the three epidemics of fraud that hyper-inflated the bubble, drove the financial crisis, and caused the Great Recession,” referring to appraisal, loan and secondary-market fraud.

“Thousands of elite bankers reported pathetically inadequate” estimates of their bad debts similar to this bank’s, “and they face no investigations, much less prosecutions,” Black said. “The larger bank frauds were all bailed out this time around.”