The saga of a nearly $3-billion fraudulent scheme that resulted in two bank failures, billions of dollars in losses, and the loss of over 2,000 jobs came to a close on Wednesday when courts found the culprits guilty on counts of fraud and false statements, among other charges.
[IMAGE]U.S. District Judge Leonie Brinkema sentenced Paul R. Allen, former CEO of ""Taylor Bean & Whitaker Mortgage Corporation"":http://www.taylorbean.com/PressRelease/Press.aspx (TBW), to 40 months in federal prison for his role in purposefully misrepresenting financial statements to banks over a period that lasted from 2005 to 2009.
[COLUMN_BREAK]""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,"" said Neil MacBride, U.S. attorney for the Eastern District of Virginia, according to ""_The Huffington Post_"":http://www.huffingtonpost.com/2011/06/22/mortgage-fraud-ceo-prison-paul-allen_n_881946.html.
""I messed up. I messed up big,"" ""_The Post_"":http://www.huffingtonpost.com/2011/06/22/mortgage-fraud-ceo-prison-paul-allen_n_881946.html reported Allen as saying at his hearing. ""There was no excuse for my behavior.""
Allen's sentence went alongside convictions for Sean Ragland, a co-conspirator, on charges of bank and wire fraud. The convictions follow April's conviction for former majority holder Lee Farkas, who authorities say masterminded the bank fraud. Farkas, the last of seven senior executives and employees to receive sentencing, may serve 385 years for his multiple fraud counts.
According to ""_The Los Angeles Times_"":http://www.latimes.com/business/la-fi-fraud-sentence-20110625,0,1075014.story, the trial brought to light Farkas' extravagant lifestyle, which included a private jet, a number of classic cars, and expensive real estate along the East Coast.
""Taylor Bean"":http://www.taylorbean.com/PressRelease/Press.aspx fell apart in 2009, exposing the fraud, shedding over 2,000 employees in the process, and leading to the failure of Colonial Bank, one of the nation's 25 largest banks, when it posted $500 million in losses stemming from overdrawn accounts, according to ""_The Times_"":http://www.latimes.com/business/la-fi-fraud-sentence-20110625,0,1075014.story. Two other banks, ""Deutsche Bank"":http://www.db.com/index_e.htm and ""BNP Paribas"":http://www.bnpparibas.com/en/home/, suffered $2 billion in losses as a consequence of related fraudulent acts.