Exhibit A: $1.9 Billion in Mortgage Fraud; Exhibit B: Orange Jumpsuit
UPDATE - Ex-Taylor Bean chair gets 30-year prison term.
Lee Farkas, the former chairman of Taylor, Bean & Whitaker Mortgage Corp., was sentenced by a federal judge to 30 years in prison for his part in a multibillion dollar mortgage fraud scheme, The Wall Street Journal reported Thursday in its online edition. Farkas was convicted in April of misappropriating about $3 billion from banks like Colonial Bank of Montgomery, Ala.; trying to bilk the government's Troubled Asset Relief Program out of $550 million; and pocketing $40 million.
What's interesting about this case is the role that Fannie Mae played in creating this fraud by overlooking Farkas' crimes, as Bloomberg reported yesterday.
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Original story appears below...
The name is Lee Farkas; he did not act alone, and on top of $2 billion in mortgage fraud, he tried to rip off taxpayers through TARP. We assume this case was brought by SIGTARP Barofsky, who, in case you missed it, quietly announced his resignation last week.
Do you think he takes the red Kool-Aid or the tepid whole white milk with his tray lunch? Do they pass it through the slot in the cell door, or do they let him out to eat? He's in county lock-up as he awaits trial. It's probably not very nice. The pillows and bedding have scabies. Ringworm is gonna be an issue. The toilet paper is not Charmin. He won't floss until he gets out. His fraudulent a^^ won't feel a comfortable chair for the length of his stay.
He's facing life in prison.
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The former treasurer of Taylor, Bean & Whitaker Mortgage Corp., once the 12th largest mortgage lender in the U.S., admitted helping run a $1.9 billion fraud scheme that targeted the government’s Troubled Asset Relief Program and contributed to the failure of Colonial Bank.
Desiree Brown, 45, pleaded guilty in federal court in Alexandria, Virginia, to conspiring to commit wire fraud, securities fraud and bank fraud, and agreed to cooperate with prosecutors bringing Lee Farkas, former chairman of Taylor, Bean, to trial on April 4. Brown also settled civil charges with the Securities and Exchange Commission, the SEC said.
Until today, Farkas, 58, was the only person charged in what the government said was a massive scheme to deceive financial firms and TARP by covering up shortfalls at Taylor, Bean, once the largest non-depository mortgage lender in the U.S., according to the SEC’s statement on the case. Farkas was indicted on 16 counts in June and faces the possibility of spending the rest of his life in prison, according to a Justice Department statement.
“Were there other people besides Mr. Farkas who were involved in this scheme,” U.S. District Judge Leonie M. Brinkema asked Brown at the plea hearing?
“Yes ma’am,” Brown answered.
In 2008, when Taylor, Bean’s operating losses mounted, Farkas and his conspirators allegedly tried through Colonial BancGroup, Colonial Bank’s Montgomery, Alabama-based holding company, to obtain about $553 million through TARP, prosecutors said.
The application for funding included false information, and investigators detected irregularities before any TARP money was released, according to the Justice Department.
Alabama regulators seized Colonial Bank in 2009 and the Federal Deposit Insurance Corp. was appointed as receiver. Colonial BancGroup filed for bankruptcy in 2009.
The Brown case is USA v. Brown, 1:11-cr-00084, and the Farkas case is USA v. Farkas, 1:10-cr-00200, U.S. District Court, Eastern District of Virginia (Alexandria).
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