Industry NewsMortgage

Ex-mortgage exec charged in $1.9B fraud scheme

Feds allege fake mortgage loans helped topple Colonial Bank

The former chairman of mortgage lender Taylor, Bean & Whitaker has been arrested and charged for his alleged role in a $1.9 billion fraud scheme federal prosecutors said contributed to last year's failure of Colonial Bank.Lee Bentley Farkas and co-conspirators are accused of misappropriating more than $400 million from Alabama-based Colonial Bank's mortgage warehouse lending division in Orlando, Fla., and approximately $1.5 billion from Ocala Funding, a mortgage lending facility controlled by Taylor, Bean & Whitaker (TBW).The 16-count indictment against Farkas also alleges he and his co-conspirators committed wire and securities fraud in connection with an unsuccessful attempt to obtain $553 million in Troubled Asset Relief Program (TARP) funds for Colonial Bank.An attorney for Farkas released a statement saying Farkas would enter a plea of not guilty, and "looks forward to having his day in court to clear his name."Prosecutors allege the scheme dates to 2002, when Fa...

Comments