American Greed: Cracking the Façade of Fraud

American Greed on CNBCOn this season of American Greed, CNBC profiles Lee Farkas and lender Taylor, Bean & Whitaker.

By Jenna Martino
CNBC Associate Producer

When Sandy Smith of Stevenville, Texas, purchased her home, she never dreamed there would be any issue taking out a mortgage with Taylor, Bean & Whitaker, a lending company based in Ocala, Fla. The previous homeowners had used them. This wasn’t Sandy’s first time taking out a mortgage and she thought she knew what she was getting into. She made her payments on time each month, but before she knew it, she started receiving foreclosure notices. She had unknowingly become a victim to a multibillion-dollar scam and was one of more than 500,000 homeowners who fell prey to mortgage mogul Lee Farkas.

Farkas’s crimes added up to a $2.9 billion fraud and directly led to the sixth largest bank failure in U.S. history.

The Scam

There are many layers to this scam, multiple cover-ups, and a list of criminals who took part in this massive fraud, but it all comes down to one man: Lee Farkas. His actions bankrupted his own company, TBW, one of the largest privately held mortgage lending companies in the United States, and led to the failure of Colonial Bank, one of the 25 largest banks in the United States in 2009

Read the rest of the article and comments by Tracy Coenen here.

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