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It’s Prison for Taylor Bean CEO, Analyst

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The former chief executive officer of failed Taylor, Bean and Whitaker Mortgage Corp. has been sentenced to more than three years in prison. An executive who reported to him was also sentenced.

The jail term was handed down Tuesday by U.S. District Judge Leonie M. Brinkema, the Justice Department announced.

Paul Allen, who was the CEO of the Ocala, Fla.-based company, was sentenced to 40 months in prison.

Allen pleaded guilty in April for his role in the $2.9 billion scheme that cost investors $1.5 billion and caused Taylor Bean’s warehouse lender, Colonial Savings, to lose $900 million and fail in August 2009.

“Paul Allen was a well-respected mortgage executive hired by Lee Farkas to be TBW’s chief executive officer,” U.S. Attorney Neil H. MacBride said in the government’s announcement. “Mr. Allen’s sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished.”

The former CEO was involved in the crime from 2005 until 2009. He was accused of deceiving investors in Taylor Bean-subsidiary Ocala Funding about the financial condition of the facility.

Also sentenced today was former Taylor Bean financial analyst Sean Ragland, who received just three months in jail. Ragland pleaded guilty in March.

The saga began in 2002 as former Taylor Bean chairman Lee Bentley Farkas devised a scheme to make up an operating deficit at the company by running overdrafts with the help of Colonial Bank employees. Eventually they began selling mortgages to Colonial that didn’t exist or were already encumbered.

Other recent activity in the case:

  • Former Colonial Bank senior vice president Catherine Kissick sentenced this month to eight years in prison.

  • Lee Farkas awaits a June 27 sentencing after being found guilty in April.

  • Former Colonial Bank operations supervisor Teresa Kelly pled guilty in March.

  • Former Colonial Bank warehouse lending executive Catherine L. Kissick pled guilty in February.

  • Former Taylor Bean president Raymond Bowman was sentenced in June to two-and-a-half years in prison.

  • Former Taylor Bean treasurer, Desiree Brown, was sentenced to six years in prison.

United States of America v. Paul Allen.
(U.S. District Court for the Eastern District of Virginia).

United States of America v. Sean Ragland.
(U.S. District Court for the Eastern District of Virginia).

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