April 20 (Bloomberg)--Lee Farkas, former President of Taylor, bean & Whitaker Mortgage Corp., was found guilty on 14 counts of conspiracy and wire fraud, Bank and securities in what prosecutors said was a plan of $ 3 billion involving a fake active mortgage.
A jury in Alexandria Virginia, yesterday delivered the verdict after a day of deliberations. Farkas, who was free during the trial, was placed in detention. He faces a maximum sentence of 30 years on charges of conspiracy and bank fraud and 20 years or the counts of wire fraud and securities fraud when he is sentenced on July 1. prosecutors said Farkas, 58, orchestrated one of the largest and longest banking fraud in United States who fooled some of the largest financial institutions of the country. target for the Federal Bank rescue program and has contributed to the failures of Taylor Bean and based in Montgomery, Alabama Colonial Bank.Assistant Attorney General Lanny Breuer, head of the criminal division of the Department of Justice, fraud of Farkas said "poured fuel on the fire" of the financial crisis. "The financial crisis has many faces and now face of Lee Farkas is one of them,"Breuer, who attended part of the trial, said after the verdict to a conference call with journalists. "Current ' said InvestigationBreuer investigation of the Government in the fraud scheme is"in progress ". He refused to say if more people could be charged.Prosecutors spent eight days establishing the allegations of the jurors. The Government called 23 witnesses, including Freddie Mac, Bank of America Corp. and Deutsche Bank AG. Six of those who testified were former colleagues or associates of Farkas, who had pleaded guilty to charges of conspiracy.Farkas used Taylor Bean as his own "personal piggy" and stole more than 30 million of the company, he built to purchase houses, cars, planes, restaurants and other businesses aside, said Assistant U.S. Attorney Charles Connolly closing arguments.Farkas, who denied any wrongdoing, testified in his own name and called the two former employees of Taylor Bean and a forensic in its defence.William Cummings, one of the counsel of Farkas, said that the defence team was disappointed with the verdict. "We fought hard,"said Cummings, a former U.S. Attorney in Virginia." "Getting six former colleagues to plead guilty and to testify is difficult to overcome obstacle."Cummings said he was surprised U.S. District Judge Leonie Brinkema ordered Farkas to be imprisoned, adding that the judge has said that it would hear arguments week in whether to be released while he awaits sentencing next.Rolls RoyceProsecutors seek to seize properties Farkas has in Florida and the Georgia, and nine vehicles, including a model of Ford A 1929 and 1963 Rolls Royce.Taylor Bean, based in Ocala, Florida, has been serving over 500,000 mortgage loans with Freddie Mac loans $ 51 billion when it collapsed in August 2009, according to court records of.Prosecutors allege fraud began in 2002 when Farkas had blurred meeting expenses of operation, such as the list of payroll and loan mortgage maintenance payments to the Government - sponsored assistance Freddie Mac and Ginnie Mae.With of servants to the Colonial Bankboth among the 50 of the country more grandFarkas hidden gaps of about 15 million dollars a day by moving money to another account of Taylor Bean master account of the company, and then returning the money later in the dayAccording to a related prosecution by the U.S. Securities and Exchange Commission.Overdrawn AccountBy December 2003Bean Taylor has been overexploitation his account about 150 million dollars a day, the SEC said.Farkas, about four hours of testimony, denied ordering anyone to move money between accounts Taylor Bean and said that he and Taylor Bean employees have the power to do so.The Government claims that Farkas and other conspirators, in a system, they called "Plan B," began to send data from mortgage to Colonial Bank to loans that did not exist, or that Taylor Bean had already committed or sold to other investors.False LoansBy the end of 2007, the regime was composed of approximately 500 million in false residential mortgages and about 900 million in non-tradable residential mortgages and securities, said Patrick Stokes, Deputy Chief of the fraud of the Ministry of Justice of United States section., closing arguments.Farkas and his accomplices hijacking cash Ocala Funding LLC, a vehicle for funding used and controlled by Taylor Bean, to cover its losses, said prosecutors.Ocala funding issued commercial paper backed by assets of financial institutions, including the Deutsche Bank, the biggest German bank based in Paris, BNP Paribas, according to court documents. In August 2009, Ocala deficit had risen to $ 1.5 billion, according to prosecutors.As Colonial Bank is struggling to stay afloat, Farkas attempted to collect $ 300 million from private investors to ensure an infusion of cash of $ 550 million of the Federal Troubled Asset Relief Program, according to Paul Allen, former Director General company who pleaded guilty to conspiracy. Farkas was found guilty of falsely representing that he had commitments from investors for money.Colonial has never cover, said United States .taylor Bean funds accounted for approximately 2% of the mortgages for individual houses by volume purchased by Freddie Mac in 2009, according to a company filing. The firm said it filed a claim in bankruptcy Taylor Bean of $ 1.8 billion, with $ 440 million relating to the funds deposited with Bank.Alabama regulators seized Colonial Colonial Bank in 2009 and the Federal Deposit Insurance Corp. was appointed receiver. Colonial BancGroup and Taylor Bean filed bankruptcy in 2009.the is U.S. v. Farkas, is 10-cr-00200, U.S. District Court, District of Virginia (Alexandria).-Editors: Fred Strasser, Peter Blumberg
To contact the reporter on this story: Tom Schoenberg in Washington to tschoenberg@bloomberg.net
To contact the editor responsible for this story: Michael Hytha to the mhytha@bloomberg.net
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