According to two, independent sources with knowledge of federal investigations involving both the Colonial BancGroup / Taylor Bean case and the BingoGate case USA vs. McGregor et al, the plea deals being agreed to by Taylor Bean’s Desiree Brown and Colonial’s Catherine Kissick are “just the start,” and more plea deals and/or indictments are forthcoming.
Media coverage of the Desiree Brown hearing last week in US District Court for the Eastern District of Virginia noted that Lee Farkas, the former CEO of Taylor Brown, has himself entertained pleading guilty in exchange for his testimony.
Federal banking regulators, securities regulators and law enforcement officials are investigating a nearly $2.0 billion fraud scheme, allegedly concocted by senior Taylor Bean and Colonial officials.
Farkas is a big fish in these investigations and faces the potential of never getting out of prison except feet first. In order for the government to even entertain a plea agreement, the testimony he provides would have to be monumental.
A bit of background: There have been precious few indictments, much less convictions or guilty pleas, regarding billions over billions in alleged fraudulent applications for relief under the US’ Troubled Asset Relief Program (TARP). There are a myriad of investigations being conducted across the country, with some notable successes and a few disappointments (not worth going into here). But political pressure is growing to get a scalp or three from someone sitting at the top of the financial institutions. The problem, according to both legal and political sources, is that many of the top executives most often mentioned as TARP money miners are Wall Street executives who have poured millions into political campaigns for federal offices over the last several cycles.
Not wanting to bite the hands that have been feeding them for years, the government is looking elsewhere. A little farther down the food chain, if you will. Colonial BancGroup, at the height of its power and prestige, was a $26 billion, multi-state bank holding company with tentacles in Alabama, Florida, Georgia and Nevada. When it failed in summer of 2009, it was the largest failure of the year and the sixth largest in US history.
The CEO and other top officials of that and other smaller, less politically powerful (nationally) institutions are prime targets of the Department of Justice which, if you understand “how things work,” is still headed by a political appointee with an propensity for protecting favored constituencies.