A Good Start, But Just That
June 11, 2011 Leave a comment
A Start. Even describing the recent convictions against two top executives at Taylor, Bean and Whitaker as in the same category as the larger financial crisis paints an incomplete picture fraught with chances to sidestep our focus. Sorry, the point being: yes, what TBW did was against the law, but do not take your eyes off Goldman, Lehman, and the true culprits behind the September 2008 collapse.
Desiree Brown (treasurer) and Raymond Bowman (president) got six and two-and-a-half years. Lee Farkas, the companies owner and chairman, has yet to recieve his conviction and sentence – though with his treasurer and president having fallen, one expects a substantial jail sentence for Farkas.
A summary of TBW’s crimes follows verbatim from the St. Pete Times:
Taylor Bean cheated three banks, including Alabama-based Colonial Bank, out of nearly $3 billion over nearly a decade before the scheme unraveled in 2009, resulting in the collapse of Taylor Bean and the loss of jobs for its 2,000 workers, as well as the collapse of Colonial, which had been one of the 25 largest banks in America.
In large part, Taylor Bean concealed its fraud by selling or using as collateral mortgages that had already been sold to other investors. Midlevel executives at Colonial participated in the scheme and helped conceal the massive hole in Taylor Bean’s account, at first to preserve their relationship with Taylor Bean and later because they were complicit and felt they had no choice but to continue.
The scheme also included a failed attempt to use the cooked books at Colonial and Taylor Bean to try to get more than $500 million in emergency funding from the government’s Troubled Asset Relief Program, or TARP.