WASHINGTON — The former chairman of a large mortgage lending company has been charged in a $1.9 billion fraud scheme that contributed to the failure of Colonial Bank, one of the nation’s 50 largest banks before it was seized by regulators last year, the Justice Department said yesterday.
Lee Bentley Farkas, who led Florida-based Taylor, Bean & Whitaker, was arrested Tuesday in Ocala, Fla., after being indicted by a federal grand jury in Alexandria, Va., on bank fraud and other charges.
Taylor, Bean was one of the nation’s largest privately held mortgage lending companies before it filed for bankruptcy protection last year, and officials said the fraud scheme precipitated its collapse as well.
Court documents said Farkas and coconspirators at both companies misappropriated more than $400 million from Colonial and about $1.5 billion from a Taylor, Bean-owned firm to cover the firm’s operating losses.
Who?
Farkas, 57, is also charged with trying to defraud the government out of $553 million in Troubled Asset Relief Program bank bailout funds as the losses mounted.
If convicted, Farkas faces a likely sentence of life in prison.--more--"
