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Former Taylor, Bean & Whitaker Chief Financial Officer Delton de Armas, pleaded guilty for his role in a $2.9 billion fraud scheme that brought down the firm and Colonial Bank.

On Tuesday, de Armas admitted to charges of making false statements and conspiring to commit bank and wire fraud. He faces a maximum penalty of up to 10 years in prison. Sentencing is scheduled for June 15.

Ocala, Fla.-based TBW was once the 12th largest mortgage lender in the U.S. It originated, serviced and sold pools of home loans to Freddie Mac. It also wrote mortgages insured by the Federal Housing Administration.

In June, former CEO Lee Farkas was sentenced to 30 years in prison for orchestrating a fraud scheme designed to sweep funds and cover overdrafts in its Colonial and Ocala Funding facility accounts.

The fraud lasted from 2002 through August 2009. The Special Inspector General for the Troubled Asset Relief Program caught onto the scheme when TBW applied for $553 million in bailout relief.

Six co-conspirators at TBW, Ocala and Colonial were sentenced last year with prison terms ranging between three months to eight years.

U.S. Attorney Neil MacBride said when de Armas learned of a hole in Ocala Funding, which was a TBW subsidiary built to use investor money to fund the loans, he decided to cover it up.

"Today's plea is the eighth conviction in one of the nation's largest bank frauds in history," MacBride said. "As CFO, Mr. de Armas could have put a stop to the fraud the moment he discovered it. Instead, the hole in Ocala Funding grew to $1.5 billion on his watch, and as it grew, so did his lies to investors and the government."


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