Today Federal regulators charged Lee Farkas, the former chairman of Taylor, Bean and Whitaker Mortgage Corp., with a multi-billion dollar fraud conspiracy involving the government's massive Wall Street bailout program. This scheme resulted in the collapse of Colonial Bank in 2009.
Lee Farkas, allegedly defrauded the bank by selling it more than $1.5 billion in fake or fraudulent mortgage loans. Farkas was indicted in a 16-count indictment for overseeing a seven-year fraud that concealed massive financial losses. He is now charged with conspiracy, bank fraud, wire fraud and security fraud. Lee Farkas was taken into custody Tuesday night where he was found leaving a gym he currently owns in Ocala, Florida. Officers have uncovered emails from Farkas and his co-conspirators declaring their next steps on how to cover their tracks and move money around to avoid being discovered. One email from an un-indentified conspirator said “you need to wire money into this account on the OD (overdraft) report. It does not look good to have a T&I (tax and insurance) account in the OD report” Lanny Breuer, the assistant attorney general at the Justice Department, said, "This alleged fraud scheme is an example of the damaging and destabilizing impact financial crimes can have on our nation's financial institutions. Individuals and companies that violate the law in a reckless pursuit of profits must be held accountable for their crimes." The Justice Department is now seeking the forfeiture of Farkas' properties in Florida and numerous luxury cars, just a fraction of what he has swindled.
