Posted on Thursday, March 17, 2011
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, of Ocala, Florida, 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.
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 priso n on each count, plus a fine of as much as $500,000 and full restitution to victims, according to prosecutors.
Two other Taylor Bean executives, including former Chairman Lee Farkas, previously were charged in the alleged scheme to deceive financial firms and TARP by covering up shortfalls at Ocala-based Taylor Bean. Taylor Bean was once the largest non- depository mortgage lender in the U.S., the Securities and Exchange Commission said in a statement. Farkas’s trial on 16 counts is scheduled for April 4.
Desiree Brown, Taylor Bean’s former treasurer, and Catherine Kissick, a former Colonial Bank executive, have pleaded guilty to conspiracy to commit wire fraud, bank fraud and securities fraud and agreed to cooperate in the government’s prosecution of Farkas. Both also settled securities cases with the SEC.
Prosecutors said officials at Taylor Bean conspired with officials at Colonial Bank to transfer more than $400 million between the bank and the mortgage lender to hide Taylor Bean overdrafts.
Alabama regulators seized Colonial Bank in 2009 and the Federal Deposit Insurance Corp. was appointed as receiver. Colonial BancGroup Inc. (CBCGQ), Colonial’s parent company, and Taylor Bean filed for bankruptcy in 2009.
The cases are U.S. v. Bowman, 11-cr-00118, and U.S. v. Kelly, 11-cr-00119, U.S. District Court, Eastern District of Virginia (Alexandria).