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Posted at 05:32 PM ET, 03/14/2011

Mortgage official pleads guilty

The former president of Taylor, Bean & Whitaker pleaded guilty Monday to conspiring to commit bank, wire and securities fraud and lying to federal agents about his role in a scheme that led to the failure of both the mortgage company and Colonial Bank.

Raymond Bowman, 45, of Atlanta, entered his plea before U.S. District Judge Leonie M. Brinkema in Alexandria. He faces a maximum penalty of five years in prison on the conspiracy charge and a maximum five years on the false statements charge. He is scheduled to be sentenced on June 10.

Prosecutors say that Bowman is part of a larger fraud scheme that TBW’s former chairman Lee Bentley Farkas is accused of masterminding.

Farkas is scheduled to go to trial in early April, although lawyers for Farkas filed a motion for a delay.

Farkas is charged in a 16-count indictment. Two other co-conspirators -- Desiree Brown, the former treasurer of TBW, and Catherine Kissick, a former senior vice president of Colonial Bank, pleaded guilty over the past two months for their roles in the fraud scheme.

According to court documents, Bowman admitted that from 2003 through August 2009, he and his co-conspirators, including Farkas, engaged in a scheme to defraud various entities by leading them to purchase tens of millions of dollars of worthless assets.

In early 2002, Bowman learned that TBW began running overdrafts in its master account at Colonial Bank because TBW couldn’t pay its operating expenses. Bowman and other co-conspirators tried to cover up the overdrafts by sweeping money from one TBW account with excess funds into another and by selling fake mortgage loans to Colonial Bank.

Bowman also was involved in another alleged scheme in which a sister company called Ocala Funding was set up to help TBW service its mortgage loans. Ocala ended up having a deficit of $1.5 billion because of fake mortgages.

By  |  05:32 PM ET, 03/14/2011

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