A federal judge has sentenced ex- Taylor, Bean & Whitaker chairman Lee Farkas to 30-years behind bars for heading up a $2.9 billion financial scheme that led to the downfall of both mortgage lender Taylor Bean and Colonial Bank. The bank fraud cheated the government and investors of billions.
Farkas, who was convicted by a jury of numerous criminal counts, conspiracy to bank fraud, wire fraud, and securities fraud, is accused of making $40 million from the scam. He must now turn over about $35 million.
Also paying a price for her involvement in the fraud is ex-Colonial Bank senior vice president Catherine Kissick. The 50-year-old former head of Colonial’s’ mortgage-warehouse lender pleaded guilty to one count of conspiracy to commit bank fraud, wire fraud, and securities fraud.
The SEC is accusing Kissick of enabling the sale of impaired and bogus securities and mortgage loans to Taylor Bean. She also is accused of mischaracterizing the securities as liquid, quality assets to investors.
Assistant Attorney General Lanny Breuer has said that not only did Kissick assist in the execution of the largest bank fraud ever, but also she used her position at Colonial to purchase hundreds of million dollars in assets from TBW that were worthless to fool investors, shareholders, and regulators. Kissick is sentenced to 8-years in prison.
Several others have pleaded guilty to the financial scam, including Teresa Kelly, a former operations supervisor who worked under Kissick. Kelly, who pleaded guilty to the same charge as Kissick, is sentenced to three months behind bars. She is accused of abusing her access to the accounting systems at Colonial Bank to perpetuate the fraud.
Others who have pleaded guilty for their involvement are ex-Taylor Bean president Raymond E. Bowman and former firm treasurer Desiree Brown. Former chief executive Paul Allen was sentenced to 40 months for his participation in the bank scam.
Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud