Lee B. Farkas, the former chairman of Taylor, Bean and Whitaker Mortgage Corporation, was found guilty Tuesday on all 14 charges arising from a seven-year, multi-billion-dollar fraud that lead to the collapse of his firm and Colonial Bank, according to an article in the April 20, 2011 edition of The Wall Street Journal by Nick Timiraos and Eric Morath.

It was one of the first major criminal convictions of a mortgage exeutive stemming from the mortgage-market bust, the article noted.

According to the article, Mr. Farkas, who owned airplanes, several homes and dozens of cars could spend the rest of his life in prison. "Over nearly two decades," the article said, "Mr. Farkas transformed the sleepy Ocala, Fla.-based firm into the largest non-bank mortgage lender in the country. At its height, it was the fifth-largest originator of loans insured by the Federal Housing Administration and one of the top sellers of mortgages to Freddie Mac."

An article by Ben Protess in the April 20, 2011 edition of The New York Times said that

"Mr. Farkas,58, faces decades in prison for his role in the $2.9 billion plot, which prosecutors say was one of the largest and longest bank fraud schemes in American history and led to the 2009 collapse of Colonial Bank."

"The 10-day trial," the article continued, "was a rare win for federal prosecutors in the aftermath of the financial mess. The Justice Department has yet to bring changes against an executive who ran a major Wall Street firm leading up to the disaster. An earlier case against hedge fund managers at Bear Stearns ended in acquittal. Prosecutors dropped their investigation into Angelo R. Mozilo, the former chief of Countrywide Financial, which nearly collapsed under the weight of souring sub\prime home loans. Six other Taylor, Bean & Whitaker executives - including its former chief executive and former treasurer- have already pleaded guilty. Some agreed to testify against Mr. Farkas at his trial."

According to the article, prosecutors said the lender "sold Colonial about $1.5 billion in 'worthless' and 'fake' mortgages, some of which had already been bought by other institutional investors. The government, in turn, guaranteed those fraudulent home loans.

"With the credit crisis in full swing," the article continued, "Mr. Farkas and other Taylor, Bean & Whitaker executives persuaded Colonial to apply for $570 million in federal bailout funds through the Troubled Asset Relief Program, or TARP. The treasury department approved the rescue funds, on the condition that Colonial was able to raise $300 million in private money. The Taylor, Bean & Whitaker executives falsely led the bank into thinking it had investors lined up. Ultimately the government did not give any money to Colonial."