Tuesday, February 22, 2011

Mortgage exec tied to Colonial Bank failure will plead guilty

image This not at all a surprising development, but it does come at a very curious time.  According to Reuters, former Taylor Bean & Whittaker executive Desiree Brown will enter a guilty plea to federal financial wrongdoing charges and cooperate with prosecutors.

There are no details regarding the charges Brown will cop to, but Judge Leonie Brinkema has a hearing set for 9:15 am EST Thursday in the District Court for the Eastern District of Virginia.

A similar hearing scheduled in the USA vs. McGregor et al case (BingoGate) tipped us off that Jarrod Massey was pleading guilty.

Taylor, Bean & Whitaker was the largest non-depository mortgage lender in the country when it failed in August 2009. DOJ obtained indictments against its former CEO Lee Farkas of orchestrating a complicated fraud scheme that led to billions of dollars in losses that still haven’t been counted yet.  TBW’s failure led to the failure of $26 billion Colonial, which was the largest bank failure in 2009 and the sixth largest in US history.

Included in the Farkas indictment are statements implicating “senior executives” of Colonial Bank and Colonial BancGroup, the bank’s holding company.  Colonial’s former CEO is none other than Bobby Lowder, the megabooster accused of micromanaging his bank and Auburn University.

Ms. Brown will likely plead guilty to pilfering TBW accounts for about $1.5 million, but she is also expected to have wide ranging knowledge of the various schemes alleged to have been devised by Farkas and Colonial execs.

Also on Colonial’s Board of Directors:  Former Auburn Head Football Coach Pat Dye, and casino  owner, political powerbroker, and Auburn booster, Milton McGregor. As luck would have it, these gentlemen also have demonstrated business relationships with Robert Geddie, another Auburn booster and graduate. Geddie and McGregor stand trial this summer in the BingoGate case.

Regular readers of this blog already know how to connect the dots.

Exit question: If Farkas sees that his goose is cooked, does he roll on the Money Man?

h/t Crimson Corner Blog.

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