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Taylor, Bean & Whitaker account with excess in another, and later through the fictitious "sales" of mortgage loans to
Colonial Bank, a fraud the conspirators dubbed "Plan B." Court records show the conspirators sent mortgage data to Colonial Bank for loans that didn't exist or that Taylor, Bean & Whitaker had already committed or sold to other third-party investors.
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head of
Colonial Bank's Mortgage Warehouse Lending Division, and her co-conspirators, including former Taylor, Bean & Whitaker Chairman Lee Farkas, whereby they defrauded various entities and individuals, including Colonial Bank, Colonial BancGroup, Taylor, Bean & Whitaker, the Troubled Asset Relief Program, and the investing public.
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Between 2004 and 2009 management at Taylor, Bean & Whitaker fraudulently sold $ 400 million worth of fake mortgages to
Colonial with the help of a Colonial bank executive. The fraud scheme was between 2002 and 2009, and involved Catherine Kissick, former senior vice president of Colonial Bank and
180:
The principal activity of the BancGroup was to supervise and coordinate the business of its subsidiaries, and to provide them with capital and services. The BancGroup derived substantially all of its income from dividends received from
Colonial Bank, its banking subsidiary. The BancGroup's subsidiary
247:
as the auditor of
Colonial Bank, seeking $ 5.5 billion in damages. The trustee alleged in the 2013 suit that PricewaterhouseCoopers was negligent in not detecting a massive fraud scheme that brought down Taylor, Bean & Whitaker, which led to the 2009 collapse of Colonial Bank, a Montgomery, Ala.
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According to court documents, Taylor, Bean & Whitaker began running overdrafts in its master bank account at
Colonial Bank. Starting in 2002, Kissick, Farkas and their co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one
223:
Colonial disclosed its legal problems on August 4, 2009, stating that federal agents had executed a search warrant at its mortgage warehouse lending offices in
Orlando, Fla. and that it had been forced to sign a cease and desist order with the Federal Reserve and regulators at the end of last month
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PricewaterhouseCoopers has maintained in court documents that its responsibility is to follow accounting principles — which might not necessarily detect fraud. But in a pretrial brief issued by the trustee, former
PricewaterhouseCoopers chairman Dennis Nally is quoted in a 2007 Wall Street Journal
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The fraud caused
Colonial BancGroup to file materially false financial data with the SEC regarding its assets in annual reports contained in Forms 10-K and quarterly filings contained in Forms 10-Q. Colonial BancGroup's materially false financial data included overstated assets for mortgage loans
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Kissick admitted she knew and understood she and her co-conspirators had caused
Colonial Bank to pay Taylor, Bean & Whitaker for assets that were worthless to the bank. As a result, false information was entered on Colonial Bank's books and records, giving the appearance that the bank owned
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Colonial Brokerage, Inc. provided full service and discount brokerage services and investment advice. The BancGroup had interests in several residential and commercial real estate developments located in the southeastern United States, as well as two in the central Texas area.
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The closely watched case could lead to billions of dollars in damages depending on how a jury answers a fundamental question in accounting: How much responsibility do auditors have for catching fraud? The suit has since been settled for an undisclosed sum in August 2016.
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that Taylor Bean had forged, in one of the biggest fraud cases in history. On August 25, 2009 it filed for Chapter 11 bankruptcy. The banking assets and branches were sold to
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On January 31, 2006, Colonial Bank sold its interest in Goldleaf Technologies, Inc., which provides Internet and automated clearing house services to community banks.
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The Bank was founded in 1974 in Montgomery, Alabama as Southland Bancorporation. The company changed its name to The Colonial BancGroup, Inc. in 1981.
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The bankruptcy trustee for Taylor, Bean & Whitaker Mortgage Corp., once one of the nation’s biggest privately held mortgage companies, is suing
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138:, United States that failed in 2009. It was a financial services company that, through its subsidiaries, provided diversified services, including
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235:. The bankruptcy case's name is "In re Colonial BancGroup Inc, U.S. Bankruptcy Court, Middle District of Alabama (Montgomery), No. 09-32303".
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interests in legitimate pools of mortgage loans when in fact the pools had no value and could not be securitized or sold.
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in relation to its accounting practices and its recognition of losses. On August 14 it was announced that
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article saying that the "audit profession has always had a responsibility for the detection of fraud".
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bank with $ 25 billion in assets, one of the biggest U.S. bank collapses during the Great Recession.
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The company ran into problems after it was revealed that it had bought $ 1 billion in mortgages from
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150:. The company was in the top 50 largest banks in the US prior to its failure and its subsidiary,
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This was the biggest bank failure of 2009. On August 25 Colonial BancGroup filed for
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Fitzpatrick, Dan; Enrich, David; Crittenden, Michael R. (August 15, 2009).
395:"Ex-Taylor Bean President Admits His Role in $ 1.9 Billion Financial Fraud"
414:"United States v. Catherine Kissick Court Docket Number: 1:11-cr-88-LMB"
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450:"United States v. Lee Bentley Farkas Court Docket Number: 1:10-cr-200"
692:"Largest lawsuit against an auditor goes to court for $ 5.5 billion"
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would buy Colonial's branches and deposits in a deal with the FDIC.
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At the end of the fourth quarter of 2008, Colonial Bancgroup had a
665:"Crisis-Era Lawsuits Winding Down? Not for PricewaterhouseCoopers"
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This article incorporates text from this source, which is in the
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of 53.4%, up from a figure of 25% in the first quarter of 2008.
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290:"Jury convicts exec in $ 3B mortgage fraud case - Yahoo! News"
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477:"BB&T buys Colonial bank; 4 other banks fail – CNN Money"
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The fraud in total would cost Colonial over $ 1.9 billion.
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Press, South Florida Business Journal (June 10, 2009).
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Companies that filed for Chapter 11 bankruptcy in 2009
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Isidore, Chris; Pepitone, Julianne (August 14, 2009).
146:, wealth management services, mortgage banking and
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580:"BB&T buys Colonial bank; 4 other banks fail"
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344:"Company Overview of Colonial Bancgroup Inc"
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519:"Colonial hit with cease and desist order"
195:Taylor, Bean & Whitaker Mortgage fraud
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420:. The Department of Justice. June 9, 2015
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370:"One in eight lenders may fail, RBC says"
605:"Colonial Bancgroup Chapter 11 Petition"
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724:Companies based in Montgomery, Alabama
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634:"Colonial BancGroup files Chapter 11"
632:Stempel, Jonathan (August 26, 2009).
167:Federal Deposit Insurance Corporation
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663:Rapoport, Michael (July 29, 2016).
734:Defunct banks of the United States
376:. February 9, 2009. Archived from
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754:2009 disestablishments in Alabama
134:holding company headquartered in
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744:1981 establishments in Alabama
475:Press, CNN (August 15, 2009).
239:PricewaterhouseCoopers lawsuit
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212:that had little to no value.
749:Banks disestablished in 2009
397:. Bloomberg. March 15, 2011.
561:"Major Bank Fails in South"
456:. The Department of Justice
346:. Bloomberg. Archived from
159:Taylor, Bean & Whitaker
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739:Banks established in 1981
671:. The Wall Street Journal
94:Banking assets seized by
79:August 14, 2009
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565:The Wall Street Journal
128:Colonial BancGroup Inc.
759:Banks based in Alabama
245:PricewaterhouseCoopers
219:Disclosure and failure
169:(FDIC) brokered deal.
233:Chapter 11 bankruptcy
380:on February 1, 2013.
316:"Colonial Bancgroup"
669:Wall Street Journal
136:Montgomery, Alabama
110:Montgomery, Alabama
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698:. The Miami Herald
690:Chabeli, Herrera.
544:has generic name (
502:has generic name (
144:commercial banking
98:and later sold to
53:financial services
28:Colonial BancGroup
18:Colonial BancGroup
296:on April 24, 2011
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612:PacerMonitor
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348:the original
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294:the original
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274:Banks portal
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106:Headquarters
70:Bobby Lowder
42:Company type
454:justice.gov
418:justice.gov
189:Texas ratio
117:Area served
718:Categories
645:August 27,
524:August 15,
482:August 15,
260:References
83:2009-08-14
589:April 30,
492:cite news
300:April 20,
148:insurance
702:July 29,
675:July 29,
534:cite web
460:June 15,
424:June 15,
354:July 14,
226:BB&T
163:BB&T
100:BB&T
50:Industry
639:Reuters
617:June 8,
374:Reuters
328:June 8,
173:History
81: (
76:Defunct
66:Founder
58:Founded
140:retail
130:was a
608:(PDF)
319:(PDF)
704:2016
677:2016
647:2009
619:2016
591:2010
546:help
526:2009
504:help
484:2009
462:2015
426:2015
356:2013
330:2016
302:2011
142:and
132:bank
96:FDIC
91:Fate
61:1974
584:CNN
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