Thursday, February 24, 2011

BREAKING: Taylor Bean exec tied to Colonial Bank failure pleads guilty

As expected and as covered here earlier this week, Desiree Brown, former Taylor Bean & Whitaker Treasurer, has agreed to plead guilty. In exchange for her testimony, some charges will likely be dropped.

Ms. Brown knows where the bones are buried, in south Florida and in central Alabama.

Via Reuters:

Feb 24 (Reuters) - The former treasurer of bankrupt Taylor, Bean & Whitaker Mortgage Corp, Desiree Brown, pleaded guilty on Thursday to conspiracy, the first plea in one of the biggest fraud cases stemming from the U.S. mortgage meltdown.

Brown, who eventually rose to become the treasurer from being a receptionist at the large mortgage firm, is expected to cooperate with prosecutors as they pursue criminal charges against the former chairman of TBW, Lee Farkas.

Taylor, Bean & Whitaker filed for bankruptcy in August 2009 and prosecutors have estimated the fraud involves some $1.9 billion and potentially billions of dollars more in losses to federal housing programs.

Farkas has pleaded not guilty to 16 counts of fraud and conspiracy charges. His trial is slated to begin on April 4.

Brown’s plea deal is huge from several different angles.  It’s the only guilty plea to date in the case that brought down two titans of the mortgage business: Taylor Bean and Colonial Bank.

Colonial Bank has admitted that it is also a target of a federal criminal investigation, and many analysts and observers believe Colonial Bank executives will be indicted.

The FBI, the SEC and the US Attorneys Office does not comment on the existence or status of ongoing investigations.

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