Eideard

Two former senior Taylor, Bean & Whitaker Mortgage Corp executives were sentenced on Friday to several years in prison for their roles in a nearly $3 billion fraud that took down the big lender and a major bank.

The fraud ran more than seven years until August 2009 when TBW collapsed after the U.S. housing market imploded, taking Colonial BancGroup Colonial Bank with it and putting hundreds of people at the firm out of work.

Company and bank officials were accused of trying to cover up enormous losses by moving money between accounts at Colonial Bank and selling mortgage loans that did not exist, were worthless or already had been sold.

The Obama administration elicited guilty pleas from six senior executives. TBW’s former chairman, Lee Farkas, was convicted by a jury in April on 14 counts of bank, securities and wire fraud as well as conspiracy.

“They knew that without their fraud scheme, TBW would fail,” said Neil MacBride, the U.S. attorney for eastern Virginia. “They allowed Lee Farkas to control and manipulate them into doing what they knew was wrong, and now they will pay for their crimes.”

It is one of the few cases in which prosecutors have been able to penetrate the executive suites of a major firm in the wake of the 2008 global financial crisis. Most prosecutions have involved lower-level employees or much smaller firms…

Judge Leonie Brinkema…sentenced TBW’s former president, Raymond Bowman, to 30 months in prison. He had pleaded guilty to a conspiracy fraud charge as well as for lying to investigators when they raided the mortgage firm two years ago…

Connolly told the judge that the TBW investigation was ongoing. Farkas is due to be sentenced on June 27.

Throw the key away!

This week, a federal jury in Virginia convicted mortgage executive Lee Farkas on fraud and conspiracy charges that could send him to prison for life.

Authorities say Farkas tried to defraud banks out of almost $3 billion, in one of the biggest cases to come out of the mortgage crisis. And that, critics say, is the problem. Almost three years after the economy nearly collapsed, most top Wall Street banks and their executives have emerged with no criminal trouble. And that’s making people angry.

The argument that prosecutors have gone light on the nation’s largest banks for their role in the financial meltdown has become really popular — even if it’s not true.

Not so for Farkas, 58, who cut a larger-than-life figure in his north Florida community. In his heyday, Farkas collected cars — including a 1963 Rolls Royce and a Ford Model A. He served caviar in the dining room at his mortgage lending company Taylor Bean and Whitaker, or TBW…

“Farkas was really the mastermind of one of the largest bank fraud schemes in history,” says Lanny Breuer, who runs the criminal division at the Justice Department. “What he did led not only to the downfall of TBW, perhaps the second largest mortgage lending company in the United States, but also led to the failure of one of the country’s largest commercial banks, Colonial.”

Late Tuesday, a federal jury in Virginia convicted Farkas of all 14 charges against him. A judge immediately ordered Farkas into custody. He could get life in prison when he’s sentenced July 1…

Breuer of the Justice Department says public opinion doesn’t influence his decisions.

“When we believe we have a criminal case where we can prove each of the elements beyond a reasonable doubt, we’re going to do it,” he says. “When we don’t believe we can prove a case beyond a reasonable doubt, we’re not going to do it, no matter … how popular it would be.”

Two parts of the same problem. The lawyers who seem to set the standards for judges and legal beagles alike have slowed down the system of justice so radically that you could die of old age before you have a chance at justice in America. And the bits and pieces that fade away over time diminish the likelihood of a conviction.

Probably little need to note lobbyists paid by Wall Street who carry the message to an outraged Congress – whose wallets are as open as their mouths. They’re most often a subset of the same group of lawyers chartered and funded by corporations to rebuild that edifice in the image of corruption and shame.