June 24, 2011

Feds seek life in prison for ex-mortgage boss behind $3B fraud

By Michael Winter, USA TODAY
Updated 5m ago

Federal prosecutors want the 58-year-old former head of one of the nation's largest private mortgage lenders to spend the rest of his life in prison for orchestrating a $3 billion fraud that took down a major bank.

In asking a federal judge in Alexandria, Va., for the maximum 385-year sentence, prosecutors compared Lee B. Farkas to Bernie Madoff and other notorious swindlers, noting that he continues to deny responsibility for a "fraud of staggering proportions." His lawyers want a prison term of no more than 15 years.

Farkas of Ocala, Fla., is to be sentenced June 30.

The former majority owner of Florida-based Taylor Bean & Whitaker was convicted in April on 14 counts of conspiracy and bank, wire and securities fraud for masterminding one of the biggest bank frauds in U.S. history.

Taylor Bean collapsed in 2009 when the fraud unraveled, and 2,000 employees lost their jobs. The fraud contributed to the 2009 failure of Alabama-based Colonial Bank, once one of the country's 25 largest banks.

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