Wednesday, April 13, 2011

ColonialPalooza: “They’re looking at Colonial, and nothing else.”


Big hat tip to, who is watching the Lee Farkas trial in Eastern Virginia much closer than I have been.

Testimony and evidence today centered around Ocala Funding, the asset-backed commercial paper arm of Taylor Bean & Whitaker. According to the former financial analyst for the failed mortgage giant, he was manipulating the books from the inception of the firm until the day the offices were raided and the whole scheme collapsed.

ATPB links to a report from Suevon Lee of a Florida news network, who has been providing day-to-day reports on the trial proceedings.

The term “commercial paper” refers to the short-term debt obligations of both large and small businesses. These obligations, having maturities ranging from months to days, are traded in the open market at a discount from face value. A company borrows $98,000 from a bank for day-to-day operations and agrees to pay the lender $100,000 at maturity.

Most so-called “money market” and interest-bearing checking accounts are heavily invested in the commercial paper market, and it was the the complete halt in this market that so toxically threatened the banking system from late 2007 through summer 2009.

The prosecution alleges that having people like Farkas, his employees and alleged co-conspirators at Colonial BancGroup fraudulently manipulating these markets was one of the the primary reasons why things got so dicey during the banking crisis.

The money quote—if you’ll pardon the pun—comes at the end of Ms. Lee’s report:

[Sean] Ragland's testimony followed statements from Desiree Brown, Taylor Bean's former treasurer. The jury heard a tape recorded conversation between Brown and Farkas on Aug. 4, 2009, a day after FBI agents raided Taylor Bean's Ocala headquarters and Colonial Bank's Mortgage Warehouse Lending Division in Orlando.

"The only thing they're looking at is Colonial and nothing else," Farkas tells Brown on the recorded call, in reference to the bank's failed efforts to receive TARP funding.

Remember, the very first time you heard of connections between Colonial, BingoGate and potential pay-for-play shenanigans at Auburn University was right here, on November 16, 2010. Those connections were explored in more depth later, both here, and again right here.

At the time, I was accused of all kinds of conspiracy theorism, black helicopterism and other such stuff.  Those connections I’ve been blogging about for the last 4-1/2 months are now starting to take shape, and not in the form of rumors or message board posts.

They’re playing out in a US District Court, many miles away from Montgomery and the Wire Road Exit on I-85.

I also told readers why the FBI wanted to interview people associated with the Cam Newton recruitment. We saw how my information panned out, didn’t we? This may become the biggest case mashup in world frickin history.  Or, it might not depending on how other District judges rule on other evidence in other cases. But…

In the inimitable words of Rush Limbaugh: “Don’t doubt me, folks. Don’t. Doubt. Me.”

Exit Question: When Farkas takes the stand—as he will almost certainly do now—does he go “all in” and finger the Micromanager?

Follow me on Twitter and Facebook, and visit the Timeline Page for a complete chronology of events.


Tim said...

Roll Tide sir. I follow and applaud your efforts in keeping us up to date!

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