Thank you for using our forum. My name is ***** ***** I hope to assist you today.
I am sorry to learn about this situation with the bank.
While it is possible to use a valid claim as an offset against a judgment, the problem with your situation is that it is a contested claim at this point. Until the status is resolved, it is not going to be sufficient to simply write the bank and tell them that you are considering the debt satisfied because of their error.
I do not believe that you should simply walk away from a $200,000.00 bank error though.
What I would suggest however is perhaps a change in your approach. In reading your post above (and the "what have you tried" section), it appears you have approached the bank's error as a criminal matter, this is more appropriately characterized as a civil dispute and possibly a regulatory matter.
While there are many variables over which I have no control (and many facts which I cannot review for you here), in general, taking a different approach/tact on this issue is likely to yield a much different result, however. You are going to have to walk back a bit on this from approaching the bank (and their senior level employees) as criminals and guilty of federal crimes, and instead try to approach this as a breach of contract (the loan agreements, deposit agreements, etc.), which you can enforce, and potentially regulatory matters (which are enforced by various banking entities: http://www.ffiec.gov/consumercenter/.
But if you want to maximize your chances of resolving this favorably at this point, I would recommend hiring a lawyer to help you approach this from the civil side (breach of contract angle). That is going to give you the best possible aspect to getting the credit you are entitled to and allow you to offset this claim against the civil judgment you currently have against you.
You need a lawyer because of the scope of the dispute (nearly $200,000.00), and most significantly because of the procedural posture you have framed the matter in previously (it is going to be much easier for an attorney to walk this back from the threats of federal criminal prosecution and reframe them in the civil light). Finally, a civil litigation attorney will be able to coordinate these two actions for you, and hopefully get a stay on enforcement of the judgment while you are working this dispute out over the deposit error.