Ex-TBW CFO Pleads Guilty In $2.9 Billion Fraud Case

Posted by Orb Staff on March 21, 2012 No Comments
Categories : Residential Mortgage

11143_crime Ex-TBW CFO Pleads Guilty In $2.9 Billion Fraud Case Delton de Armas, a former chief financial officer (CFO) at Taylor, Bean & Whitaker Mortgage Corp. (TBW), has pleaded guilty to making false statements and conspiring to commit bank and wire fraud for his role in a more than $2.9 billion fraud scheme that contributed to the failures of TBW and Colonial Bank.

De Armas also admitted in court that he directed a subordinate to inflate an account receivable balance for loan participations in TBW's financial statements. De Armas acknowledged that he knew that the falsified financial statements were subsequently provided to Ginnie Mae and Freddie Mac.

De Armas pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. He faces a maximum penalty of 10 years in prison when he is sentenced on June 15.

‘With our nation in a housing crisis, de Armas, as chief financial officer of TBW, one of the country's largest mortgage lenders, papered over a gaping hole in the balance sheet of TBW subsidiary Ocala Funding and lied to regulators and investors to cover it up,’ says Christy Romero, deputy special inspector general for SIGTARP. ‘The fraud provided cover to others at TBW to misappropriate more than $1 billion in Ocala funds and sell fraudulent, worthless securities to conspirators at Colonial BancGroup. SIGTARP and its law enforcement partners stopped $553 million in TARP funds from being lost to this fraud and brought accountability and justice that the American taxpayers deserve.’

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