The U.S. economy was stuck in a worsening credit crisis, but Tommy Wu was seemingly on top of the world during the black tie dinner the night of Nov. 29, 2007.

The Hong Kong native was being honored at New York's Pierre Hotel by the American Banker publication for turning a sleepy San Francisco Chinatown savings and loan into one of the nation's largest banking companies serving Chinese Americans.

Wu gave an emotional speech, thanking his wife, Jessa, for her support while he led the 1998 management buyout of what was to become United Commercial Bank.

Earlier that same year, United Commercial became the first U.S. financial institution to purchase outright a mainland China bank _ a crowning achievement for Wu and his bank. The company's stock was soaring on the back of the bank's extraordinary growth. United had doubled in size in the eight years since its initial public offering and Wu was reaching for even greater heights, feverishly opening offices across the country and in Hong Kong, Taiwan and China.

Today, Wu is facing mounting legal problems and United Commercial is no more _ federal regulators shuttered it in November 2009 and its corporate parent filed for bankruptcy.

Regulators charge Wu's pursuit of the Chinese bank and worldwide acclaim is at the center of United's spectacular collapse _ a failure that will cost taxpayers more than $3 billion and has led to the first criminal prosecutions of senior executives of banks that received part of the federal government's $700 billion bailout of financial institutions. The nearly $300 million government bailout United received is gone and federal regulators estimate the bank's failure will cost taxpayers another $2.5 billion in deposit insurance.

The Securities and Exchange Commission said United is one of the 10 largest bank failures during the financial crisis.

"This is a case about a modest, regional financial institution that, through the hubris of its central leader (Defendant Thomas "Tommy" Wu) and with the complicity, and inattention of its directors and officers, went on a mad quest to be an international player," lawyers for the government-appointed trustee overseeing United's bankruptcy case wrote to a judge.

The trustee is seeking millions of dollars in damages from Wu and the carrier that provided him with directors and officer insurance, a standard policy at most companies that covers legal expenses and damages incurred by executives.

"He was the central force in causing the company to leave the path of a modest, regional bank holding company and attempt to make it a global powerhouse_and himself a global player," the trustee's lawyers wrote.

One of those lawyers, Thomas Koegel, said Thursday he couldn't comment further because the case has been sent to a mediator who ordered confidentiality.

Wu's attorneys say their client is being made a scapegoat for the financial crisis and is being singled out by authorities under fire for failing to charge high-ranking executives responsible for the industry's near-collapse.

"Hundreds of banks have failed in the financial crisis and the regulators need to blame someone," Wu's attorney Steven Bauer said in a statement to the media this past week. "Thomas Wu is counting on our justice system to clear his good name."

The bank was known as United Federal Savings and Loan when it first opened its doors in 1974 with a plan to serve San Francisco's growing Chinese-American community with mortgages and small business loans.

Wu and his wife arrived in San Francisco in 1991 to oversee the business for its then-Hong Kong corporate parent, First Pacific Bank. Seven years later, Wu led a $120 million management buyout of the savings and loan, changed its charter to a bank and offered shares of the company to the public.

During his 2007 speech in New York accepting the award for community banker of the year, Wu recalled how difficult it was to pull off the first management buyout of a U.S. financial institution in 1998.

"We sold everything we had back then to raise the cash," American Banker quoted him as saying in an article about the dinner.

He and his wife bought a mansion in the tony San Francisco suburb of Hillsborough and ingratiated themselves to the city's high society. They donated generously to the San Francisco Symphony and Wu served on its board of governors until August 2010. They appeared often in publications chronicling the rich and famous at Symphony openers, fundraisers and other civic causes.

While Wu was at the helm, the bank's asset grew from $2 billion to more than $13 billion. He publicly proclaimed his desire to grow the bank assets to as much as $20 billion by 2010.

Instead, Wu is facing myriad legal challenges over his management of the bank. The SEC has filed a lawsuit seeking millions, the FDIC wants to bar him from the industry and he is still the focus of a criminal probe.

Two of Wu's former subordinate executives _ Ebrahim Shabudin and Thomas Yu _ were indicted this past week with fraud for allegedly covering up bad loans and lying to auditors and government regulators about the bank's health. Each faces a maximum prison sentence of 25 years if convicted.

Lawyers for Shabudin and Yu didn't return phone calls.

Prosecutors say the bank's loan portfolio ballooned from $4.4 billion in 2004 to more than $8 billion three years later. But by 2008, prosecutors and regulators allege, an overwhelming number of the bank's loan recipients were defaulting, including Lenny Dykstra, the former professional baseball player and financier now jailed awaiting trial on bankruptcy fraud and other charges, who owes the failed bank $1.1 million.

Robert Khuzami, the SEC's enforcement chief, said the "charges reflect an all too familiar pattern _ corporate executives once seen as rising stars embrace deception to avoid losses and conceal negative news, with investors and the FDIC insurance fund left to pick up the pieces."