How SIGTARP Nabbed Farkas in His Mortgage Scheme

Palm Coast, FL – May 1, 2011 – Former Taylor, Bean and Whitaker CEO Lee Farkas was convicted in April for orchestrating a $3 billion bank fraud scheme that lasted nearly a decade. But investigators said in a report this week they only caught on to him when he went after federal bailout money.

Ocala, Fla. – based TBW originated, serviced and sold mortgages in pools to Freddie Mac and leaned on various financing vehicles, usually with Colonial Bank and Ocala Funding, to fund the loans. According to U.S. prosecutors, Farkas and co-conspirators at Colonial Bank devised a scheme in early 2002 to cover up cash flow problems. The scheme led to the bankruptcy of TBW and the closing of Colonial, one of the most complicated and disastrous bank failures in U.S. history.

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