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Taylor Bean President, Treasurer Headed to Prison

Desiree Brown receives 72 months, Raymond Bowman sentenced to 30 months

June 10, 2011

By staff

One of the first defendants to plead guilty in the Taylor Bean and Whitaker Mortgage Corp. debacle has been sentenced to prison, as has the company's former president.

As treasurer of the failed Ocala, Fla.-based company, Desiree Brown illegally collected more than $1.5 million, according to a lawsuit filed in May 2010 by Lloyd's London. Almost half of that amount was collected a little more than a week before the company ended operations.

Turns out that Brown was helping former Taylor Bean chairman Lee Bentley Farkas cover up a massive secondary scam that began in 2002. Brown, along with a team of other defendants, allegedly helped cover up overdrafts by selling fictitious mortgages or loans that were already committed elsewhere.

The scam led to the eventual collapse of Taylor Bean and the August 2009 failure of the company's warehouse lender, Colonial Bank.

Brown pled guilty in February to conspiring with Farkas from 2003 until 2009 to defraud failed Colonial Bank, Deutsche Bank and BNP Paribas so that funds intended for the financing of production could instead be used to cover expenses at the money-losing company.

On Friday, the Department of Justice announced that U.S. District Court Judge Leonie M Brinkema sentenced Brown to 72 months in prison for her role in the $2.9 billion scheme.

Brown still faces Securities and Exchange Commission charges of aiding and abetting in securities fraud for her role in attempting to obtain funding from the Troubled Asset Relief Program, or TARP.

Also sentenced today was Raymond Bowman, the former president of Taylor Bean. Bowman -- who pled guilty in March to conspiring to commit bank, wire and securities fraud and lying to federal agents about his role in the scheme -- was sentenced to 30 months in prison.

Bowman learned of the overdraft scheme in 2002 and began covering it up the following year.

He admitted to artificially inflating the value of servicing rights by billions of dollars in order to avoid margin calls. In addition, he came clean about hiding a $1.5 billion deficit at subsidiary Ocala Funding LLC from Freddie Mac and Colonial.

"Today's prison sentences reflect the seriousness of their conduct, while also recognizing the substantial assistance they ultimately provided to the government in investigating and prosecuting Mr. Farkas and other co-conspirators," Assistant Attorney General Lanny Breuer said in the news release.

U.S. Attorney for the Eastern District of Virginia Neil H. MacBride added that the former Taylor Bean executives pulled of "one of the largest, longest-running bank fraud schemes in history."

United States v. Raymond Bowman.
Court Docket Number: 1:11-cr-118-LMB (U.S. District Court for the Eastern District of Virginia.

In Re: Taylor Bean & Whitaker Mortgage Corporation.
Case No. 3:09-bk-07047, August 2009 (U.S. Bankruptcy Court for the Middle District of Florida).

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