Mortgage Lender Guilty of $2.9B Fraud

Most bank CEOs may have escaped the financial crisis with their hides, but Lee B. Farkas wasn’t so lucky: A federal jury found Farkas, former chairman of Taylor, Bean, and Whitaker, guilty of cheating investors and the government out of $2.9 billion. Prosecutors say Taylor, Bean, and Whitaker, once one of the largest mortgage lenders, began hiding the firm’s losses in 2002, secretly overdrawing its Colonial Bank accounts. In return, the company sold Colonial bank “worthless” and “fake” mortgages, which the government guaranteed. Colonial Ban collapsed in 2009. Six other Taylor, Bean, and Whitaker executives have pleaded guilty. Farkas faces decades in prison.