Friday, April 15, 2011

ColonialPalooza: Yes, Farkas is on the stand today

Update to an earlier post. Scroll down for updates.

image "It is always the defendant's choice," says his attorney, William Cummings.

It’s usually a train wreck when the accused takes the stand in his own defense because it opens him up to cross-examination by the prosecution. But in this case, Farkas may have no choice. The prosecution has paraded a slew of his former employees and business associates, who’ve outlined an extravagant lifestyle and inner circle fringe benefit spending that would make Fiesta Bowl executives envious.

The prosecution rested Thursday. The defense began its case Thursday with three witnesses: two former Taylor Bean employees and an Atlanta-based Accountant who testified that Colonial received as much as $20 million more than was withdrawn in the allegedly fraudulent transfers.


In her testimony later Thursday afternoon, Karen Fortune, the defense expert witness, said according to her analysis, Colonial, as the result of all these transfers, received back more than $20 million in cash than it advanced to Taylor Bean.

She acknowledged on cross-examination, however, that her job was not to make any evaluation as to the validity of the transactions, just assess the amounts Colonial had advanced and ultimately received back.

"It's not your testimony here that, as long as Colonial makes money, crime pays, is it?" Assistant U.S. Attorney Charles Connolly posed to the witness.


Developments throughout the day. Suevon Lee, the Ocala Star-Banner reporter covering the trial should have an update on whether he takes the stand.

Getcha some popcorn, because there's another big fish swimming around out there that the government would like to get the straight skinny on, and Farkas almost certainly has the goods.

UPDATE: As expected, Mr. Farkas is indeed on the stand.


So far, Farkas has claimed that "Plan B", which prosecutors allege was a way to sell Colonial hundreds of millions of dollars in "fake" loans, was the brainchild of Cathie Kissick, the head of Colonial's Orlando-based Mortgage Warehouse Lending Division, whom he first met in the mid-1990s before Taylor Bean exploded into the mortgage lender it became.

"She was very creative in ways to come up with ways for us to fund more loans," he said.

As for the overnight sweeping, which prosecutors claim was funneling money from Taylor Bean's investor funding account into its master account at Colonial, allegedly to help cover operating expenses at the company, Farkas said this all happened under someone else's direction.

"It was someone at Colonial who had authority to make those transactions at the time," he said, adding he sent an internal team from Taylor Bean to "investigate" these overdrafts but never received an explanation that met his level of satisfaction.


Who within the Colonial inner circle would have had sufficient authority to ok a check kiting scheme that rose into the ten-figure range, generating gobs of cash in overnight interest fees?

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