Taylor Bean Chairman on Trial — Along With Colonial Bank and Auburn University
Today, the trial of the first big name from the financial meltdown will take place in a courtroom in Alexandria, VA as the case of the U.S. vs. Lee Farkas moves forward with opening statements.
Lee Farkas, the founder and former chairman of the now bankrupt Taylor, Bean & Whitaker Mortgage Corp. (TBW), is on trial for fraud associated with loans sold to Colonial Bank and other institutions. TBW was a huge feeder of packaged mortgages to Colonial Bank, which was seized by government banking regulators in August 2009 and their assets taken over by BB&T. It was the 6th largest bank to fail in the United States and the poster child of bad loans gone-bad in the state of Florida, where it was heavily invested. Farkas is accused of conspiring with members of his staff and employees at Colonial to sell $1.5 billion in bogus mortgages to the bank. Five people have pleaded guilty including the CEO, president and treasurer of TBW along with two executives at Colonial Bank. Farkas must be sweating it but there’s another interesting story involving Colonial Bank that is still developing.
Lee Farkas, the founder and former chairman of the now bankrupt Taylor, Bean & Whitaker Mortgage Corp. (TBW), is on trial for fraud associated with loans sold to Colonial Bank and other institutions. TBW was a huge feeder of packaged mortgages to Colonial Bank, which was seized by government banking regulators in August 2009 and their assets taken over by BB&T. It was the 6th largest bank to fail in the United States and the poster child of bad loans gone-bad in the state of Florida, where it was heavily invested. Farkas is accused of conspiring with members of his staff and employees at Colonial to sell $1.5 billion in bogus mortgages to the bank. Five people have pleaded guilty including the CEO, president and treasurer of TBW along with two executives at Colonial Bank. Farkas must be sweating it but there’s another interesting story involving Colonial Bank that is still developing.
Four months prior to the Colonial Bank closing, its chairman and CEO, Bobby Lowder, announced his retirement. Great timing. No charges have been filed against Lowder, yet. Lowder, who is on the Board of Trustees for Auburn University and graduate of Auburn, has seen his world crumble these past few years. Besides the bank he founded in 1981 going bust, he had appointed Milton McGregor (Auburn Alum and good friend), to the board of directors of Colonial. McGregor, whose name is more synonymous with being an athletic booster of Auburn football, also owns gambling establishments in Alabama that go under the name of VictoryLand. McGregor was arrested this past October on bribery and fraud charges along with 10 others related to buying votes on gaming laws in the state legislature. Also on the board of Colonial was Pat Dye, former Auburn football coach, who left the program in 1992 under the shadow of NCAA violations for alumni paying players of the team. In fact, there were a number of Auburn alums on the board or in officer positions at Colonial including CFO Sarah Moore, COO Patti Hill, James Rane III (of YellaWood fame), William Powell III (Alabama Cattlemen Assoc) and others. How much of a role, if any, each of these figures will play in the trial of TBW’s Farkas will be seen in the upcoming weeks.
So what did Auburn grad and Colonial Bank chairman Bobby Lowder do when the heat was on and he needed someone to take over his bank in 2009, prior to it going bust? He chose Lewis Beville as President and CEO. And at what fine institution did Mr. Beville matriculate? Not Auburn….try rival University of Alabama. And you thought these rivalries only played themselves out on the football field.
Alabama is not banking territory, it’s football territory. So the big story there is not the Farkas trial or the banking scandal unfolding, but the FBI and NCAA continued investigation of the Auburn football program related to payments possibly made to Auburn Tiger quarterback Cam Newton (Heisman Trophy winner). However, it probably doesn’t look good when your top player is suspected of taking payments when so many alums are affiliated with a now defunct bank.
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