The former chief executive of Taylor, Bean & Whitaker Mortgage, Paul R. Allen, admitted to his role in what prosecutors say was a $1.9 billion fraud that included attempts to deceive the federal bank bailout program.
According to Bloomberg, Allen, 55, pleaded guilty Friday in federal court in Alexandria, Va., to one count of conspiracy to commit bank and wire fraud and one count of making false statements.
Allen, of Oakdale, Va., agreed to cooperate in the prosecutors' probe of Taylor Bean, including the case against its former chairman Lee Farkas, who went on trial Monday.
Federal prosecutors filed a criminal case against Allen Thursday before U.S. District Judge Leonie Brinkema, who has presided over cases resulting from a scheme that the U.S. said sought to defraud the government's Troubled Asset Relief Program and contributed to the failure of Colonial Bank of Montgomery, Ala.
Allen faces a maximum sentence of five years in prison on each count when he is sentenced on June 21, Peter Carr, a spokesman for the U.S. Attorney for the Eastern District of Virginia, said.
Four other Taylor Bean officials and two former Colonial Bank officials were charged in the scheme to deceive financial firms and Tarp by covering up shortfalls at Taylor Bean, which is based in Ocala, Fla. Taylor Bean was once the largest nondepository mortgage lender in the U.S., the Securities and Exchange Commission said in a statement.
