Former TBW Chairman Indicted For Fraud

Posted by Orb Staff on June 17, 2010 No Comments
Categories : Residential Mortgage

Taylor, Bean & Whitaker (TBW) Chairman Lee Bentley Farkas was arrested this week and charged in a 16-count indictment for his alleged role in a more than $1.9 billion fraud scheme that contributed to the failures last year of Colonial Bank and TBW. The charges were announced today by members of the Financial Fraud Enforcement Task Force. An indictment unsealed Wednesday in U.S. District Court for the Eastern District of Virginia charges Farkas, of Ocala, Fla., with one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; six counts of wire fraud; and three counts of securities fraud. The indictment also seeks approximately $22 million in forfeiture from Farkas. According to the indictment, Farkas and his co-conspirators allegedly engaged in a scheme to misappropriate more than $400 million from Colonial Bank's mortgage warehouse lending division in Orlando, Fla., and approximately $1.5 billion from Ocala Funding, a mortgage lending facility controlled by TBW. Farkas and his co-conspirators allegedly misappropriated this money to cover TBW's operating losses. ‘Mr. Farkas and his co-conspirators allegedly went to great lengths to conceal their fraudulent activity and create the appearance that TBW was operating as a legitimate business,’ Lanny Breuer, assistant attorney general for the Justice Department's criminal division, said in prepared remarks Wednesday. ‘In reality, Mr. Farkas and his co-conspirators were allegedly stealing massive amounts of money to keep TBW afloat.’ According to the government motion seeking Farkas' detention, the fraud scheme contributed to the failures of Colonial Bank and TBW. The indictment further alleges that Farkas and his co-conspirators committed wire and securities fraud in connection with their attempt to convince the U.S. government to provide Colonial Bank with approximately $553 million in funding under the Troubled Asset Relief Program (TARP). A complete list of the charges against Farkas is available on the Department of Justice's website. SOURCE: [link=http://www.justice.gov/opa/pr/2010/June/10-crm-703.html]U.S. Justice Department[

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