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Introducing An Orange Jumpsuit: Mortgage Fraudster Sentenced To 30 Years In Prison (Breaking Story)

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.


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.


Source - Bloomberg

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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Reader Comments (17)

Finally! Some good news. Thanks for heads up; hopefully more to follow.

For those of you who haven't caught it yet, Charles Ferguson's documentary on the financial crisis "Inside Job" is excellent. It's coming out on DVD on March 8th and I highly recommend it. Although a word of warning; it will raise your blood pressure. Every time I saw that toad Blankfein was on screen, I was having heart palpitations screaming at this bastard.
Feb 25, 2011 at 10:36 AM | Unregistered CommenterGreg Diablo
thanks greg...we're big fans of ferguson...
Feb 25, 2011 at 10:40 AM | Registered CommenterDailyBail
Feb 25, 2011 at 11:21 AM | Registered CommenterDailyBail
Zillow: Home Price Declines Now Exceed The Great Depression, Prices Fall For 53rd Straight Month

Feb 25, 2011 at 11:22 AM | Registered CommenterDailyBail
UPDATE: Fannie, Freddie Bailout Could Double In Size To $360 Billion - It Will Eventually Be $1 Trillion

Feb 25, 2011 at 11:23 AM | Registered CommenterDailyBail
@ Greg Really looking forward to seeing this. Thanks for sharing.

Inside Job Trailer:
Feb 25, 2011 at 11:29 AM | Unregistered CommenterInWestor
inwestor...lee farkas is essentially a more ambitious todd leary...

Feb 25, 2011 at 11:51 AM | Registered CommenterDailyBail
Blankfein was on screen, I was having heart palpitations screaming at this bastard.

Always drink 6 beers before watching tv anytime your hart would pound out of yr chest, so that wont happen. We need you to watchnthese Crook's go to jail......!.
Feb 25, 2011 at 11:37 PM | Unregistered CommenterTexas Dar
It's a start. Now we need to get Bernacke, Paulson, Geithner, Greenspan and the rest of the tribe fitted.
Feb 28, 2011 at 10:47 AM | Unregistered Commenterrobertsgt40
One small step for a man one giant leap for mankind. About 499,999 more to be tried, prosecuted and convicted.
Jul 1, 2011 at 2:46 PM | Unregistered CommenterHarry Johnson
agreed harry...but we'll take it...now some heads need to roll at fannie mae...did you read this...

Jul 1, 2011 at 2:50 PM | Registered CommenterDailyBail
Bank of America Settles for $8.5 BILLION PLUS for Fraudulent Mortgages

Jul 1, 2011 at 2:51 PM | Unregistered CommenterLiberatedCitizen
Check Taylor, Bean & Whitaker's political contributions to either party.
They may not have been keeping up with their protection payments to the Capitol Hill mobs.

Goldman plays it safe--they pay to both families (the GOP and the DNC) but up the ante about mid election to the non-incumbent party. If you check their protection payment totals for 2007 they were mostly going to Guido at the DNC, now they're paying double to Aldo over at the GOP.

Of course, we get to replenish all with the AFB (amazing fuckin' bailout).

Happy Friday!
Jul 1, 2011 at 3:38 PM | Unregistered CommenterWil Martindale
Happy 'Overthrow Your Government Day' on Monday, Wil...
Jul 1, 2011 at 3:47 PM | Registered CommenterDailyBail
Great, we need to see more bank execs in jail. the main crook that should be in jail is Angelo Mozilo, the crook that created suprime and the reason why we are all struggling in this recession.
Jul 5, 2011 at 11:14 AM | Unregistered Commentersell short
ah...sell short makes an appearance...good to see you brasco...hope all is going well..
Jul 5, 2011 at 11:29 AM | Registered CommenterDailyBail
thank you DailyBail,
I have been reading this board on regular basis, just not posting as much.

keep up the great work!!
Jul 5, 2011 at 12:28 PM | Unregistered Commentersell short

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