A federal jury in Alexandria, Va., found Lee Farkas, onetime chairman of Florida-based Taylor Bean & Whitaker, guilty on all 14 counts of bank, wire and securities fraud. He was taken into custody pending sentencing July 1.
Prosecutors called it one of the largest bank frauds in U.S. history and one of the most significant convictions stemming from the recent financial crisis. The fraud contributed to the collapse of Alabama-based Colonial Bank, the sixth-largest failure in U.S. history.
Six others pleaded guilty and agreed to testify against Farkas.
The gang of suit-and-tie thieves also tried to scam more than $500 million from the Troubled Assets Relief Program, the taxpayer-funded bank bailout.
Farkas, 58, took the stand during the two-week trial and proclaimed his innocence.
"I didn't believe at the time I committed any crimes and I don't believe now that I committed any crimes," Farkas said.
Prosecutors disagreed, saying the evidence was overwhelming:
They said the fraud began in 2002, when Taylor Bean overdrew its main account with Colonial by several million dollars. Midlevel executives at Colonial agreed to transfer money into Taylor Bean's accounts at the end of each day to avoid generating overdraft notices, a process known as "sweeping."
As the hole grew to well over $100 million, Taylor Bean and a handful of Colonial executives concocted a scheme in which Taylor Bean sold hundreds of millions in worthless mortgages to Colonial - mortgages that had already been sold to other investors. More than $1 billion in such phony mortgages were eventually sold to Colonial, which listed them on its books and on its quarterly reports as legitimate assets, prosecutors alleged.
Tags:Troubled Assets Relief Program .div-wrapperView the Original article
No comments:
Post a Comment