Leader of Big Mortgage Lender Guilty of $2.9 Billion Fraud
By BEN PROTESS
NYT
The founder of what was once one of the nation’s largest mortgage lenders was convicted of fraud on Tuesday for masterminding a scheme that cheated investors and the government out of billions of dollars. It is one of the few successful prosecutions to come out of the financial crisis.
After more than a day of deliberations, a federal jury in Virginia found Lee B. Farkas, the former chairman of Taylor, Bean & Whitaker, guilty on 14 counts of securities, bank and wire fraud and conspiracy to commit fraud. Mr. Farkas, 58, faces decades in prison for his role in the $2.9 billion plot, which prosecutors say was one of the largest and longest bank fraud schemes in American history and led to the 2009 collapse of Colonial Bank.
“There’s no question that it is very momentous and a very significant case,” said Lanny Breuer, the assistant attorney general for the criminal division of the Justice Department.
The 10-day trial was a rare win for federal prosecutors in the aftermath of the financial mess. The Justice Department has yet to bring charges against an executive who ran a major Wall Street firm leading up to the disaster. An earlier case against hedge fund managers at Bear Stearns ended in acquittal. Prosecutors dropped their investigation into Angelo R. Mozilo, the former chief of Countrywide Financial, which nearly collapsed under the weight of souring subprime home loans.
(More here.)
NYT
The founder of what was once one of the nation’s largest mortgage lenders was convicted of fraud on Tuesday for masterminding a scheme that cheated investors and the government out of billions of dollars. It is one of the few successful prosecutions to come out of the financial crisis.
After more than a day of deliberations, a federal jury in Virginia found Lee B. Farkas, the former chairman of Taylor, Bean & Whitaker, guilty on 14 counts of securities, bank and wire fraud and conspiracy to commit fraud. Mr. Farkas, 58, faces decades in prison for his role in the $2.9 billion plot, which prosecutors say was one of the largest and longest bank fraud schemes in American history and led to the 2009 collapse of Colonial Bank.
“There’s no question that it is very momentous and a very significant case,” said Lanny Breuer, the assistant attorney general for the criminal division of the Justice Department.
The 10-day trial was a rare win for federal prosecutors in the aftermath of the financial mess. The Justice Department has yet to bring charges against an executive who ran a major Wall Street firm leading up to the disaster. An earlier case against hedge fund managers at Bear Stearns ended in acquittal. Prosecutors dropped their investigation into Angelo R. Mozilo, the former chief of Countrywide Financial, which nearly collapsed under the weight of souring subprime home loans.
(More here.)
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