Taylor Bean & Whitaker Mortgage Corp.'s ex-chairman Lee Farkas lost a bid to overturn a lifelong ban on securities industry employment imposed after he was convicted of orchestrating a $3 billion scheme prosecutors said was among the biggest bank frauds recorded in the U.S.
The Securities and Exchange Commission imposed the ban after Farkas was found guilty of bank, wire and securities fraud in April 2011 and sentenced to 30 years in prison. The U.S. Court of Appeals in Richmond today rejected Farkas’ appeal.
The fraud duped some of the country’s biggest financial institutions, targeted the federal bailout program and contributed to the failures of Taylor Bean, once the 12th-largest U.S. mortgage lender, and Alabama-based Colonial Bank.
The appeals court in Richmond denied Farkas' bid to overturn his convictions in June 2012. A federal judge approved the SEC ban in May. Farkas argued on appeal that the jury in his criminal case was given improper instructions on what defines "securities" and that he wasn't given fair opportunity to litigate misstatements and omissions underlying his fraud convictions.
The SEC relied on facts addressed in Farkas' criminal prosecution to support its request for the lifetime ban, the appeals court said in its ruling today.
"We find that those facts, as well as our prior findings in Farkas’ direct appeal, amply support the court’s decision to impose the requested relief," the three-judge appeals panel said.
Farkas filed his appeal without representation by a lawyer, according to court records.