The FBI may be going after mortgage brokers accused of fraud across the U.S., but the Justice Department is also getting in on the action. Last night, its agents tracked and arrested Lee Bentley Farkas, the former chairman of Taylor, Bean & Whitaker, a mortgage-lending company that filed for Chapter 11 in 2009. He was charged with 16 counts of bank, securities and wire fraud.
Prosecutors allege that Farkas stole more than $1 billion since 2002 by engaging in complex accounting schemes under the banner of Taylor Bean & Whitaker Mortgage Corp. They also say Farkas tried to snatch up $500 million worth of TARP funds by acquiring a stake in Colonial BancGroup.
The Financial Fraud Enforcement Task Force, the group behind the arrests, includes an alphabet soup of government entities: DOJ's Criminal Division, TARP, FBI, HUD, FDIC, and the IRS.
Fret not, everyone's favorite regulator is also getting involved. The SEC has filed its own civil charges against Farkas for allegedly selling more than $1.5 billion in made-up mortgage loans and securities to Colonial Bank.
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