Yesterday federal officials announced that the former chairman of one of the nation’s largest mortgage firms, Taylor, Bean, & Whitaker had been indicted for his alleged role in a multi-billion dollar fraud scheme.
Federal officials claim that Lee Bentley Farkas committed $1.9 billion fraud against investors and the federal government. The scam allegedly directly led to the demise of not only Farkas’ firm but Colonial Bank of Alabama as well.
According to the Washington Post federal officials described an even larger scheme that caused such collateral damage to government agencies that it has only begun to be tallied.
Taylor Bean allegedly hid the true nature of the turmoil and allowed the firm to be fraudulently meet conditions that lead to them becoming one of the largest business partners of the Federal Housing Administration and Ginnie Mae.
Court documents allege that Farkas tried to cover up the scheme and used over $20 million in investor funds for personal expenses, including private jets and properties in Florida.
Farkas is also accused of trying to defraud the Treasury Department of $553 million in a scheme he and other conspirators called “Project Squirrel.”
If convicted Farkas will likely face a life sentence.
Federal authorities said the investigation will continue, which probably means that future arrest will probably be made in the coming months.
An attorney for Farkas, Anthony Cochran, said his client will plead not guilty and will "vigorously defend against the charges. He looks forward to having his day in court to clear his name."