A federal prosecutor asked a U. S. District Judge in Virginia to sentence Lee Farkas for “a period of years that would ensure that Farkas will remain in prison for life.” Farkas, the ex-chairman of Taylor, Bean & Whitaker Mortgage Corp., was convicted by a federal jury of 14 counts of conspiracy and bank, wire, and securities fraud. He masterminded a giant, long-running fraud scheme, managing to deceive financial giants and government programs for years. Ultimately, he caused the meltdown of Colonial Bank.
Explained prosecutors, “Farkas fueled his lifestyle of ostentatious wealth by ripping off banks and attempting to steal from the government, all with little to no regard for the consequences to TBW’s or Colonial Bank’s employees, thousands of whom lost their jobs when TBW and Colonial Bank closed, or to the shareholders of Colonial BancGroup.”
Farkas was an expert in deceiving federal mortgage giants Ginnie Mae and Freddie Mac, defrauding them for the better part of a decade by selling them nonexistent mortgages. After the financial crisis, Farkas also attempted to fake his bank into bailout money with a recapitalization scheme, but the money did not materialize and Colonial Bank collapsed. Farkas’ auditor, Deloitte and Touche, did not notice something was strange until 2009, nearly ten years into the scam. By the time the auditor launched an investigation, the company was well on its way to collapsing.
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photo credit: eflon
