Monday, March 14, 2011

ColonialPalooza: Third plea deal in three weeks

image This just in, courtesy of a breaking news report at

This is the third plea agreement in as many weeks, as federal investigators roll up a nearly two-year long investigation into bank fraud and other criminal activity related to the failure of Colonial Bank.

Raymond Bowman, former President of Taylor Bean & Whitaker, has agreed to plead guilty to charges of wire fraud, bank fraud, securities fraud and making false statements to federal investigators.

Taylor Bean was the largest non-depository originator of home mortgages when it filed for bankruptcy in 2009. TBW’s failure is widely blamed for the failure of Colonial Bank, which made billions by financing TBW’s mortgage business through it’s “warehousing” operation.

Colonial’s failure represented the largest bank failure of the year in 2009 and still stands as the sixth largest bank failure in US history.  From the Reuters news report linked at ATPB:

Raymond E. Bowman, the former president of Taylor, Bean & Whitaker Mortgage Corp., pleaded guilty to two charges over his role in what U.S. prosecutors said was a $1.9 billion fraud scheme.

Bowman, 45, who lives in Atlanta, entered his plea today in federal court in Alexandria, Virginia, to one count of conspiracy to commit wire fraud, bank fraud and securities fraud and one count of making false statements. Bowman also agreed to cooperate with prosecutors’ probe of the company.

Federal prosecutors filed a criminal case against Bowman last week before U.S. District Judge Leonie Brinkema, who has presided over cases resulting from an alleged scheme that the U.S. said sought to defraud the government’s Troubled Asset Relief Program and contributed to the failure of Montgomery, Alabama-based Colonial Bank.

Bowman faces a maximum sentence of five years in prison on each count, plus a fine of as much as $500,000 and full restitution to victims, according to prosecutors. Brinkema asked prosecutors whether they would file a forfeiture case against Bowman.

“That remains to be seen,” said Charles Connolly, an assistant U.S. attorney in Alexandria. “The issue we’re exploring is whether the defendant derived any benefit from the fraud scheme.”

Legal analysts tell IBCR that the investigation has achieved warp speed, with two TBW executives and one Colonial Bank executive already pleading guilty. Lee Farkas, the former CEO of TBW, is set to stand trial on a multi-count indictment in the Colonial case early next month.

Farkas himself is now considering a plea agreement, according to his attorney’s statements after the hearing in which his former Treasurer, Desiree Brown, plead guilty to fraud and other federal charges in the case.

Farkas is considered one of the “big fish” in the investigation. Any plea agreement accepted by the prosecution in this case would necessarily have to deliver some Big Time© evidence against the individual many believe is the real target of the investigation—former Colonial CEO and current Auburn University Board of Trustees member, Bobby Lowder. Also believed to be involved in the investigation are former Colonial Board of Directors members Milton McGregor and former Auburn Football Coach and Athletic Director Patrick Dye.

Federal sources would not comment on whether McGregor and Dye are targets of the ongoing federal investigations, nor would they comment on the likelihood of any additional indictments.  Mr. McGregor has already been indicted on federal charges of corruption, bribery, money laundering, extortion and fraud. That trial, which includes nine other alleged co-conspirators, is set to begin on June 6 in Montgomery.

The Mobile FBI field office is providing investigative services and other assistance to the prosecution in both the Colonial Bank case and the BingoGate case.

Getcha some popcorn, sports fans. 

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