Stewart explains it all. The Fed secretly loaned the Banks money at 97 cents on the dollar (or an interest rate of 0.01%). The banks then loaned it back to the Fed at a higher interest rate – Making 10 billion in profit. Here are the details from Bloomberg.
The people at the Fed that did all this are still there. The title of this clip is appropriately named “How The Fuck Is It That Martha Stewart Went To Jail?”