Taylor Bean & Whitaker CEO Sentenced to 30 Years in Prison
By: Carrie Bay
The man charged with orchestrating possibly one of the most notorious mortgage fraud schemes in U.S. history has been handed a 30-year prison sentence.
Lee Farkas, founder, chairman, and CEO of Taylor Bean & Whitaker (TBW), was told Thursday by U.S. District Judge Leonie M. Brinkema of Alexandria, Virginia, that his crimes merit three decades behind bars.
“I do not detect one bit of actual remorse,” Judge Brinkema told Farkas when she relayed the judgment. “You regret getting caught.”
Federal prosecutors had petitioned for a sentence of 385 years, 50 years minimum, to ensure Farkas spent the rest of his life behind bars, according to a filing with the Virginia court. They likened Farkas’ crimes to those of Bernie Madoff and former WorldCom Chairman Bernard Ebbers.
Six other co-conspirators of Farkas’, from both TBW and Colonial Bank, have pleaded guilty to federal charges of fraud. They’ve all been jailed by Brinkema, for terms ranging from three months to eight years.
A federal jury convicted Farkas on 14 counts of conspiracy, bank fraud, wire fraud, and securities fraud after two weeks of litigation in April.
Farkas took TBW from a small Florida brokerage in 1991 to one of the nation’s largest independent mortgage companies at the time of its collapse in 2009. From 2002 to 2009, his wheelings and dealings involved manufacturing fraudulent mortgages and securities.
The ripple effects of the $3 billion scheme were widespread. Not only was TBW itself shut down, but its fraudulent activities triggered the collapse of its wholly owned subsidiary Ocala Funding and warehouse lender Colonial Bank, put thousands of mortgage industry professionals out of work, and resulted in several billions of dollars in fraud losses for government-controlled agencies, including Freddie Mac and the Federal Housing Administration.
“During the housing and financial crisis, while many American taxpayers struggled just to keep their heads above water, Farkas lived in the lap of luxury using the more than $38 million that he stole from TBW and Colonial Bank,” said Christy L. Romero, acting special inspector general for the Troubled Asset Relief Program (TARP) in a statement issued Thursday.
“Farkas used the stolen money to buy a jet, expensive antique and collector cars including a Rolls Royce, and multiple vacation homes, all while masterminding a fraud of stunning scope,” Romero continued. “His fraud began to unravel when he tried to obtain TARP funds to fill the billions of dollars of holes at TBW and Colonial Bank.”
U.S. Assistant Attorney General Lanny A. Breuer added, “Lee Farkas’ boundless greed ultimately led not to a life of luxury, but to a prison cell.”
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