New Taylor Bean & Whitaker team claims ex-CEO Lee Farkas took $50 million for own benefit
Wake up and good morning. Just when you thought the Ocala-based mortgage debacle that was Taylor, Bean and Whitaker was finally over comes disturbing allegations that former chairman Lee Farkas (photo) withdrew more than $50 million from the business for his personal benefit and for companies he controlled. (Photo: Ocala Star Banner.)
Taylor Bean, as many will recall, was the nation's largest independent mortgage lender in the country. It collapsed last August after the revelation that it was the target of an investigation by the U.S. Department of Justice. In a murky transaction, the mortgage company had planned to buy control of troubled Alabama banking giant Colonial Bancgroup, but that deal was never consummated. Colonial failed last summer, a victim of its own "real estate gluttony" and was sold by the FDIC to BB&T.
Taylor Bean declared bankruptcy only days later. Since then, homeowners whose mortgages were handled by Taylor Bean have suffered from lost mortgage payments and wrong information thanks to the mortgage company's disarray and inept oversight by regulators. Here's a recap last September by the Wall Street Journal on the fall of the mortgage company.
New leadership at Taylor Bean, sifting through financial records, claim that, to cover up withdrawals by Farkas of so much money, former receptionist-turned-treasurer Desiree Brown was paid more than $1.5 million in bonuses since January 2006. And former chief financial officer Delton De'Armas and the consulting firms he owned were paid hefty sums, also allegedly to help cover up the scheme, the Ocala Star Banner reports. Here is that story.
According to the a story in the Wall Street Journal, Taylor Bean also said Farkas directed Taylor Bean employees to transfer more than $1 billion held in custodial accounts held by mortgage finance company Freddie Mac and other investors so he could use it for other business purposes. Here is Taylor Bean's legal complaint. A lawyer representing Farkas did not return reporter calls for comment.
The information regarding the alleged transfers were part of a notice of a potential claim Taylor Bean made to its London-based insurer, Lloyd's. In a filing Friday with the U.S. Bankruptcy Court in Jacksonville, Lloyd's said it shouldn't be on the hook for the alleged losses due to the alleged misconduct. Here is Lloyd's actual complaint.
-- Robert Trigaux, Times Business Columnist