Judge Leonie M. Brinkema, a federal judge in Alexandria, Va., yesterday sentenced Lee B. Farkas, a former mortgage industry executive accused of masterminding one of the largest bank fraud schemes in history, to 30 years in prison, according to an article by Ben Protess in today's edition of The New York Times.
"The Case against Mr. Farkas, the former chairman of the mortgage firm Taylor, Bean & Whitaker, sands as the single-biggest prosecution stemming from the financial crisis," the article said, adding that prosecutors has asked for a sentence of as much as 385 years, the article said. The judge remarked "I do not detect one bit of actual remorse."
As chairman of Taylor Bean, the 58-year-old Mr. Farkas orchestrated a plot that caused the demise of Colonial bank and cheated investors and the government out of billions of dollars, prosecutors say, the article said.
Mr. Farkas, who was ordered to turn over roughly $38.5 million in gains, had asked for a 15-year sentence, the article said, adding that former chief executive and treasurer and others pleaded guilty and cooperated in the cast against Mr. Farkas and they received sentences ranging from three months to eight years.
"Mr. Farkas's $2.9 billion scheme began in 2002, prosecutors say," the article said, "when Taylor Bean was facing mounting losses. To hide the losses, Taylor Bean executives secretly overdrew the firm's accounts with Colonial bank. The lender, aiming to cover up the overdrafts, sold Colonial about $1.5 billion in 'worthless' and 'fake' mortgages. The government, in turn, guaranteed the bogus loans. When Colonial started to struggle, Mr. Farkas helped convince the bank to apply for more than $550 million in taxpayer bailout funds. The Treasury Department initially approved the rescue loan, but ultimately withdrew the offer. Colonial filed for bankruptcy in August 2009, making it the sixth-largest bank failure in history."
"The Case against Mr. Farkas, the former chairman of the mortgage firm Taylor, Bean & Whitaker, sands as the single-biggest prosecution stemming from the financial crisis," the article said, adding that prosecutors has asked for a sentence of as much as 385 years, the article said. The judge remarked "I do not detect one bit of actual remorse."
As chairman of Taylor Bean, the 58-year-old Mr. Farkas orchestrated a plot that caused the demise of Colonial bank and cheated investors and the government out of billions of dollars, prosecutors say, the article said.
Mr. Farkas, who was ordered to turn over roughly $38.5 million in gains, had asked for a 15-year sentence, the article said, adding that former chief executive and treasurer and others pleaded guilty and cooperated in the cast against Mr. Farkas and they received sentences ranging from three months to eight years.
"Mr. Farkas's $2.9 billion scheme began in 2002, prosecutors say," the article said, "when Taylor Bean was facing mounting losses. To hide the losses, Taylor Bean executives secretly overdrew the firm's accounts with Colonial bank. The lender, aiming to cover up the overdrafts, sold Colonial about $1.5 billion in 'worthless' and 'fake' mortgages. The government, in turn, guaranteed the bogus loans. When Colonial started to struggle, Mr. Farkas helped convince the bank to apply for more than $550 million in taxpayer bailout funds. The Treasury Department initially approved the rescue loan, but ultimately withdrew the offer. Colonial filed for bankruptcy in August 2009, making it the sixth-largest bank failure in history."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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