17 Jun 2010

Mortgage company boss charged with fraud

10:46 am on 17 June 2010

The former head of a bankrupt mortgage lender in the United States has been charged with what US officials have called unprecedented fraud.

Lee Farkas, who was chief executive and then chairman of Taylor, Bean & Whitaker, faces 16 charges of fraud, worth more than $US1.9 billion.

The indictment also accused Mr Farkas and other unnamed conspirators of trying to obtain money from the Troubled Asset Relief Programme. However, no TARP funds were obtained.

TBW ceased operating in August 2009.

Mr Farkas is charged with conspiracy, bank fraud, wire fraud and securities fraud.

The BBC reports TBW once oversaw residential loans worth about $US30 billion, but filed for bankruptcy last August.

According to the indictment, the frauds began in 2002 when TBW began to experience cashflow problems.