US banker gets 30 years in big fraud case 2.9 Billion

Discussion in 'Law and Justice System' started by hvactec, Jun 30, 2011.

  1. hvactec

    hvactec VIP Member

    Jan 17, 2010
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    New Jersey
    WASHINGTON (AFP) – A banker was given 30 years in prison Thursday in the $2.9 billion mortgage industry fraud that sank Colonial Bank in the biggest US bank collapse in 2009, the Justice Department announced.

    Lee Bentley Farkas was sentenced to jail by a Virginia court and fined $38.5 million as the orchestrator of the fraud, which also brought down the huge mortgage lender he ran, Taylor, Bean & Whitaker, in one of the most spectacular failures during the US financial crisis.

    Farkas was accused of selling billions of dollars in worthless home loans -- loans that either did not exist or that had already been sold to other banks and investors -- to raise cash for TBW, of which Farkas was chairman and owner.

    Meanwhile he milked TBW for funds to buy himself luxury homes and an antique Rolls Royce.

    The duped customers included Colonial, government-backed home loan guarantor Freddie Mac; and Ocala Funding, a Florida entity backed by Germany's Deutsche Bank and BNP Paribas of France.
    TBW also also tried to push worthless assets on the government's Troubled Asset Relief Program, ironically designed to salvage the scandal-ridden home-loan industry.

    "Lee Farkas was the mastermind behind one of the largest fraud schemes in history involving a mortgage lending company," Michael Stephens, deputy inspector general of the US Department of Housing and Urban Development said in a statement.

    The Justice Department called it a fraud "of staggering proportions, the effects of which are still being felt by the thousands of former employees of TBW and Colonial Bank, and shareholders of Colonial BancGroup.
    full story - US banker gets 30 years in big fraud case - Yahoo! News

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