More Florida Fraud Charges

The former chairman of what was once among the largest privately held mortgage-lending companies in the country has been indicted for engaging in a $1.9 billion fraud scheme that led to the failure of Colonial Bank.

Lee Bentley Farkas was arrested Tuesday night and charged with conspiracy, bank fraud, wire fraud, and securities fraud.

The indictment alleges that Farkas and others carried out the scheme at their company, Taylor, Bean & Whitaker, in Ocala, Florida, that shut down in August 2009.

According to court documents, Farkas also personally misappropriated more than $20 million from TBW and Colonial Bank. The indictment is seeking forfeiture of the money.

Farkas and his co-conspirators allegedly engaged in a scheme to misappropriate more than $400 million from Colonial Bank’s Mortgage Warehouse Lending Division in Orlando and about $1.5 billion from Ocala Funding, a mortgage-lending facility controlled by TBW.

Farkas and his co-conspirators allegedly misappropriated this money to cover TBW’s operating losses.

More details on the alleged fraud scheme at Taylor Bean & Whitaker are available from the South Florida Business Journal.