Two Taylor, Bean & Whitaker executives received sentencing Friday for their involvement in the $2.9 billion mortgage fraud scheme led by former CEO Lee Farkas. Former TBW Treasurer Desiree Brown was sentenced to 72 months, and former TBW President Raymond Bowman received 30 months in prison, according to a spokesman for the Department of Justice. Brown and Bowman pleaded guilty to charges of bank, wire and securities fraud and testified against Farkas. TBW, based in Ocala, Fla., originated, serviced and sold mortgages in pools to Freddie Mac and relied on various purchase facilities, credit lines and other financing vehicles, usually with Colonial Bank and Ocala Funding. Many of those mortgages didn’t exist, and according to court documents, previously foreclosed homes served as collateral along with nonexistent loans in some securities. The Special Inspector General of the Troubled Asset Relief Program discovered the fraud when Farkas filed a false application on behalf of Colonial for a $553 million bailout in 2009. “Raymond Bowman and Desiree Brown used their positions as high-level executives at TBW to help Lee Farkas perpetrate a sprawling $2.9 billion fraud,” said Assistant Attorney General Lanny Breuer. “Their crimes contributed to the failure of Colonial Bank and the collapse of TBW, harming hundreds of shareholders, investors and employees. Today’s prison sentences reflect the seriousness of their conduct, while also recognizing the substantial assistance they ultimately provided to the government in investigating and prosecuting Mr. Farkas and other co-conspirators.” Colonial Bank failed and TBW filed for bankruptcy in August 2009. Ocala, which was a TBW subsidiary, folded that same month. Farkas was convicted of 14 counts of fraud in April. He faces a possible life sentence on June 27. Two executives at Colonial, Catherine Kissick and Teresa Kelly, and former Ocala chief Paul Allen also plead guilty to charges and will face sentencing in June. Write to Jon Prior. Follow him on Twitter @JonAPrior.
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