Sunday, June 20, 2010

Lee Farkas, mortgage lender, charged with TARP fraud

To help lenders and banks in trouble, the federal government created the Troubled Asset Relief Program. The cost of the TARP program has been considerably less than expected. The SEC is taking some lenders to task for a $ 1.9 billion fraudulent bill. Federal courts have charged Lee Farkas, a mortgage lender chairman, with fraud.

Article Source: Lee Farkas, mortgage lender, charged with TARP fraud By Personal Money Store

The mortgage lenders Lee Farkas headed up

All investments sold by Taylor, Bean and Whitaker were overseen by Lee Farkas, who was the chairman and majority owner. TBW sold over $ 1 billion of investments intended to defraud the TARP fund. Because of these investments, Colonial Bank was able to get TARP money from the bailout fund. While Taylor, Bean and Whitaker under Lee Farkas used to be one of the largest non-bank mortgage lenders within the U.S., it filed for bankruptcy in August of 2009.

Lee Farkas's alleged crimes against TARP

Lee Farkas, as outlined by the SEC, set up frauds that ended up costing the federal government's TARP fund $ 1.9 billion. The Securities and Exchange commission alleges that Farkas sold $ 1 billion in “damaged” mortgage loans and $ 500 million in fake loans. Colonial Bank also allegedly profited by receiving TARP funds that Lee Farkas helped them get. Along with other alleged crimes, the SEC claims that Lee Farkas cost them $ 1.9 billion.

Oversight by the Fed to increase

The amount of oversight that the Fed has is being ramped up under the watch of Ben Bernanke. The financial reform bill in Congress has gotten the support of the Fed. The oversight that both the Fed and also the SEC may have over the financial industry is also being ramped up – including increased prosecutions of those that have defrauded the funds.

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