Yes, the Obama administration IS going after the financial fraudsters...and there's a New sheriff in Town

Not a day passes that I don't see comments like these:  "Why has NO ONE been arrested?" or "Eric Holder doesn't do ANYTHING" or "Why haven't I seen ANY CEOs in prison jumpsuits?' 


Here's one:  Nice photo-Farkas in his prison garb. Gone are his houses and toys...From June 2011,  "A federal judge on Thursday sentenced Lee B. Farkas, a former mortgage industry executive accused of masterminding one of the largest bank fraud schemes in history, to 30 years in prison. "


"As chairman of Taylor Bean, Mr. Farkas orchestrated a plot that caused the demise of Colonial Bank and cheated investors and the government out of billions of dollars, prosecutors say." 


Then the story goes on say "Still, Taylor Bean was a minor financial firm based in Florida, and the crimes of Mr. Farkas began well before the crisis struck.. "  This is where I wish they'd done their homework. Exploring a little more we find  that Taylor Bean Whitaker was the largest "private" lending corporation in the USA. From Forbes (certainly not a liberal publication)


Lee Farkas, former chairman of Taylor Bean & Whitaker Mortgage Corp., was found guilty of all charges after a two week trial that had Farkas testifying on his own behalf."

In an unusual move by a defense team in a white-collar crime, they allowed Farkas to take the stand.  His testimony was that he was only trying to help keep his company stay afloat and that he did not believe that what he was doing was wrong.  What he was doing was essentially bundling and selling the same mortgages that his firm had originated twice.  Well the jury helped Farkas understand that what he did was wrong and found him guilty on all charges presented by the prosecution.  When sentenced on July 1^st, Farkas (58), who was taken into custody after the verdict, could be in prison for the remainder of his life.  His lawyers have asked for a hearing next week to allow Farkas to be out until his sentencing.

Lee Farkas built TBW from a small mortgage brokerage firm in 1991 into one of the biggest players in mortgages in the country. "

He also had to turn over $38 million in assets....the forfeiture of about eight properties in Florida, Maine and Georgia properties and nearly a dozen luxury cars as a substitute in partial payment for the money judgment against the convicted mortgage lender. He brought down TCW and Colonial bank-at one time, TBW was one of the largest privately held mortgage lending companies in the United States and Colonial Bank was one of the 25 largest banks in the United States.  

The fraud began in 2002, when Taylor Bean overdrew its main account with Colonial by several million dollars. Midlevel executives at Colonial agreed to transfer money into Taylor Bean's accounts at the end of each day to avoid generating overdraft notices, a process known as "sweeping."

As the hole grew to well over $100 million, Taylor Bean and a handful of Colonial executives concocted a scheme in which Taylor Bean sold hundreds of millions in worthless mortgages to Colonial - mortgages that had already been sold to other investors. More than $1 billion in such phony mortgages were eventually sold to Colonial, which listed them on its books and on its quarterly reports as legitimate assets, prosecutors alleged.

Six others have also pleaded guilty in the fraud scheme. As I see it, the mortgage and bank fraudsters are just like the mafia. And Eric Holder is using the same tactics as Eliot Ness. You catch the little ones and then the bigger ones. We are far from finished with this as more connections are made.

 The first sign of what would ultimately become a $3 billion fraud surfaced Jan. 11, 2000, when Fannie Mae executive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else. Fannie Mae, the government-sponsored enterprise which issues almost half of all mortgage-backed securities, determined over the next two years that more than 200 loans acquired from Taylor Bean were bogus, non-performing or lacked critical components such as mortgage insurance.

Fannie Mae CEO Daniel Mudd received $12.2 million in total compensation last year, down 15 percent from 2006, the government-sponsored enterprise said on Wednesday. Mudd's pay included his $990,000 salary, a $2.23 million bonus and a $9 million "long-term incentive" award, the company said.

And Fannie Mae is a private corporation. They knew and said nothing....but Lee Farkas is proof that even if you resign, the Eric Holder Justice Department may be on your trail...