Taylor, Bean & Whitaker Company History and Collapse

Taylor, Bean & Whitaker's roots date back to 1982 when the company was founded by Lee Farkas. The company started as a small mortgage banking firm.

The company's early success was largely due to its focus on mortgage banking and its ability to originate and sell mortgages to investors. This business model allowed the company to grow rapidly.

Taylor, Bean & Whitaker's growth continued throughout the 1990s and early 2000s, with the company becoming one of the largest private mortgage banking firms in the country. The company's success was largely due to its ability to originate and sell mortgages to investors.

However, the company's success was short-lived, and in 2009, the company collapsed due to a combination of factors, including a massive Ponzi scheme and a failed attempt to acquire a bank.

A different take: The Jordan Company

Taylor, Bean & Whitaker was a major player in the mortgage industry, closing $35 billion in residential mortgage loans in 2007.

The company employed around 2,000 workers and was the fifth-largest issuer of Ginnie Mae securities at its peak.

In 2002, the company's troubles began when it overdrew its main account with Colonial by several million dollars, marking the start of a long and complex fraud scheme.

By 2009, Taylor, Bean & Whitaker was servicing over 500,000 mortgages, including a staggering $51.2 billion of Freddie Mac loans.

The company's financial woes ultimately led to its downfall, with it filing for bankruptcy protection on August 24, 2009.

For another approach, see: Who Is Elan Financial Services

Taylor Bean & Whitaker's company history is a cautionary tale of corporate excess and financial recklessness.

The company's troubles began in 2002, when it overdrew its main account with Colonial by several million dollars.

In 2005, Taylor Bean created a special-purpose entity subsidiary called Ocala Funding.

By 2007, Taylor Bean & Whitaker was closing a staggering $35 billion in residential mortgage loans.

The company's growth was impressive, but it came at a cost. By 2009, it was servicing over 500,000 mortgages, including $51.2 billion of Freddie Mac loans.

Intriguing read: Forest Whitaker

Taylor Bean & Whitaker's financial woes continued to mount until it filed for bankruptcy protection on August 24, 2009.

More than a half-dozen executives at Colonial and Taylor Bean pleaded guilty to their roles in the scheme, and many testified against Farkas at his 2011 trial.

The company's collapse led to a major overhaul of the audit profession, with former PricewaterhouseCoopers chairman Dennis Nally stating in a 2007 Wall Street Journal article that the "audit profession has always had a responsibility for the detection of fraud".

Taylor, Bean and Whitaker Mortgage Corp was a private mortgage lender that was founded in Ocala, Florida.

The company was led by Lee Farkas, who was the chairman at the time of its collapse.

Farkas was accused of orchestrating a $1.9 billion fraud scheme that led to the company's downfall.

This scheme involved misappropriating funds from Colonial's Mortgage Warehouse Lending Division and Ocala Funding, a Taylor Bean-owned firm.

The company was experiencing a major cash flow problem when the scheme took place over a seven-year period.

Farkas and his co-conspirators engaged in a scheme to defraud the U.S. government of approximately $553 million in taxpayer funds.

Colonial BancGroup, the parent company of Colonial Bank, did not receive Troubled Asset Relief Program funds and was subsequently shut down.

Farkas faces a total statutory maximum prison sentence of 435 years if convicted of the charges against him.

Taylor, Bean & Whitaker's collapse and bankruptcy was a dramatic and swift process. The company terminated its 2,000 employees after the board of directors resigned.

Two independent directors, Bill Maloney and Bruce Layman, took over the company with the help of Neil Luria from Navigant Capital Advisors, who was appointed chief restructuring officer. Judge Jerry A. Funk approved the company's liquidation plan, which created a trust for distributing funds to creditors.

The Taylor, Bean & Whitaker Plan Trust was established to manage the distribution of funds to creditors. Neil Luria was put in charge of running the trust.

The company's collapse was triggered by a series of events, including a raid by SIGTARP special agents on August 3, 2009. The Federal Housing Administration (FHA) suspended the company from issuing FHA mortgage loans and Ginnie Mae mortgage-backed securities on August 4, 2009.

Taylor, Bean & Whitaker ceased business operations on August 5, 2009, and filed for bankruptcy protection on August 24, 2009. The company had about 2,000 employees at its headquarters.

TBW agreed to pay over $320 million to resolve fraud allegations under the False Claims Act (FCA). The allegations centered on deceptive practices that undermined federal programs, including fraudulent claims submitted to government-backed entities.

The company submitted materially false financial data to the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration (FHA) to continue issuing FHA mortgage loans and mortgage-backed securities.

TBW also siphoned funds from its subsidiary, Ocala Funding, and concealed massive overdrafts at Colonial Bank, one of its main banking partners. Court documents disclosed evidence of wire fraud, where TBW falsified financial data and manipulated overdrafts to sustain its business operations despite significant liabilities.

The case exposed a cycle of systemic fraud involving mortgage-backed securities and the misuse of funds linked to the Troubled Asset Relief Program (TARP). The fraudulent activities not only defrauded government programs like Ginnie Mae and the FHA but also left investors facing significant losses.

Ocala Funding was a conduit that purchased home loans, bundled them into securities, and sold them to investors. It funded the mortgage loan business by selling $1.75 billion of worthless asset-backed commercial paper short-term notes to Deutsche Bank and the mortgage subsidiary of BNP Paribas.

Lee Farkas, former chairman of Taylor Bean & Whitaker Mortgage Corp., was accused of orchestrating a $1.9 billion fraud scheme that led to the collapse of his company and one of its main banking partners.

TBW's fraudulent scheme involved deliberate manipulation of financial data to deceive regulators like the Alabama State Banking Department.

The company submitted materially false financial data to the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration (FHA).

TBW's misrepresentations overstated assets in quarterly filings and annual reports, misleading entities like Freddie Mac and Ginnie Mae into backing risky mortgage securities.

TBW siphoned funds from its subsidiary, Ocala Funding, and concealed massive overdrafts at Colonial Bank, one of its main banking partners.

Court documents disclosed evidence of wire fraud, where TBW falsified financial data and manipulated overdrafts to sustain its business operations despite significant liabilities.

TBW agreed to pay over $320 million to resolve fraud allegations under the False Claims Act (FCA).

This settlement exposed a cycle of systemic fraud involving mortgage-backed securities and the misuse of funds linked to the Troubled Asset Relief Program (TARP).

The company's actions defrauded government programs like Ginnie Mae and the Federal Housing Administration (FHA), leaving investors facing significant losses.

Lee Farkas, the former chairman of Taylor, Bean & Whitaker Mortgage Corp., was accused of orchestrating a $1.9 billion fraud scheme that led to the collapse of his company and one of its main banking partners.

The scheme involved misappropriating over $400 million from Colonial's Mortgage Warehouse Lending Division and $1.5 billion from Ocala Funding, a Taylor Bean-owned firm.

Farkas and his co-conspirators attempted to defraud the U.S. government of approximately $553 million in taxpayer funds during their efforts to raise $300 million in private capital for Colonial BancGroup Inc.

The indictment charges Farkas with bank, wire, and securities fraud, as well as conspiracy to commit such fraud over a seven-year period.

Farkas was arrested in Ocala and faces a total statutory maximum prison sentence of 435 years, fines of at least $13.75 million, and forfeiture of at least $22 million.

Colonial BancGroup Inc. did not receive the Troubled Asset Relief Program funds and has since been shut down.

Taylor Bean & Whitaker closed $35 billion in residential mortgage loans in 2007, but the company filed for bankruptcy protection in August 2009.

By 2009, Taylor Bean was servicing more than 500,000 mortgages, including $51.2 billion of Freddie Mac loans.

More than a half-dozen executives at Colonial and Taylor Bean pleaded guilty to their roles in the scheme, and many testified against Farkas at his 2011 trial.

You might like: Ally Financial Corporate Address

Farkas's scheme was one of the largest bank frauds in U.S. history, and it highlights the critical role of whistleblowers in exposing financial malfeasance.

The False Claims Act encourages individuals to report fraud against the government by awarding whistleblowers a percentage of the recovered funds, which in this case was millions of dollars.

Taylor Bean created and operated a special-purpose entity subsidiary called Ocala Funding, which purchased home loans and sold them to investors.

Ocala Funding was a conduit that purchased its home loans and bundled them into securities sold to Freddie Mac and other investors.

It funded the mortgage loan business by selling $1.75 billion of worthless asset-backed commercial paper short-term notes to Deutsche Bank and the mortgage subsidiary of BNP Paribas.

Deutsche Bank bought about $1.2 billion of the notes, and BNP Paribas purchased about $480.7 million in the notes.

Ocala hired Bank of America as both its trustee and collateral agent for the Ocala commercial paper.

Prosecutors said that Ocala Funding engaged in one of the largest bank frauds in United States history.

Deutsche Bank and BNP Paribas sued Bank of America over the $1.75 billion in losses stemming from the fraud.

Their agreements required Ocala to hold $1.6 billion in cash or mortgage loans as collateral to be deposited with Bank of America.

Judge Robert Sweet allowed some of the case to proceed in March 2011, writing that Deutsche Bank and BNP Paribas had stated a "plausible claim" against Bank of America.

In June 2012, Judge Sweet dismissed a counter-suit by Bank of America Corp. against the securities units of BNP Paribas and Deutsche Bank.

This lawsuit was settled in April 2015.

See what others are reading: Physician Mortgage Loans Bank of America

Taylor, Bean & Whitaker was a major player in the US mortgage industry, but its collapse in 2009 was a significant event in the financial crisis.

The company was founded in 1983 by Lee Farkas, who would later become embroiled in a massive mortgage fraud scheme.

Lee Farkas was the CEO of Taylor, Bean & Whitaker, and his leadership played a key role in the company's rise and fall.

Lee Farkas, the former chairman of Taylor Bean & Whitaker, is serving a 30-year federal prison sentence for orchestrating one of the largest bank frauds in U.S. history.

This massive fraud caused billions in losses to financial institutions and government programs, including the collapse of Colonial Bank, which heavily relied on TBW for mortgage transactions.

Farkas' schemes were so pervasive that they even entangled Home America Mortgage, which was led by former senior vice president Teresa Kelly Hicks.

Hicks is facing charges for submitting materially false financial data, further highlighting the widespread nature of fraudulent practices in the mortgage lending industry.

The government is committed to holding individuals accountable for defrauding public and private entities, and these cases demonstrate the ongoing efforts of federal agencies to ensure justice.

The Bothwell Law Group played a pivotal role in pursuing justice for the federal government and whistleblowers in the historic fraud case. Their expertise in False Claims Act litigation was instrumental in exposing the scheme that defrauded Colonial BancGroup, Ginnie Mae, and other investors.

This case is widely regarded as one of the most significant fraud prosecutions in the mortgage lending industry.