July 1, 2011
Fraudster gets 355 years less than federal prosecutors sought...
but still gets what amounts to an virtually an effective life sentences, as detailed in this Bloomberg report headined "Ex-Taylor Bean Chairman Farkas Gets 30 Years for $3 Billion Mortgage Fraud." Here are the details of a high-profile white-collar federal sentencing:
Lee Farkas, the ex-chairman of Taylor, Bean & Whitaker Mortgage Corp., was sentenced to 30 years in prison for leading a $3 billion fraud involving fake mortgage assets.
Farkas, who has been in custody since his conviction in April of 14 counts of conspiracy and bank, wire and securities fraud, was also ordered by U.S. District Judge Leonie Brinkema in Alexandria, Virginia, to forfeit more than $38 million. “I actually don’t believe you accept responsibility for these criminal acts,” Brinkema said today as she handed down the sentence. “This was a very serious series of crimes.”
Prosecutors said Farkas, 58, orchestrated one of the U.S.’s largest and longest-running bank frauds, which duped some of the country’s biggest financial institutions, targeted the federal bank bailout program and contributed to the failures of Taylor Bean and Montgomery, Alabama-based Colonial Bank....
Thomas O’Brien, counsel to the Federal Deposit Insurance Corp. as receiver for Colonial Bank, spoke at the sentencing as a victim of Farkas’s crimes. He said the collapse of Colonial Bank was the sixth-largest bank failure in U.S. history and the third largest failure since “the 2007 financial crisis.”...
Assistant Attorney General Lanny Breuer, head of the Justice Department’s criminal division, said he was pleased with the sentence even though it was less than what prosecutors had pushed for. “I think 30 years has a very powerful deterrent message,” Breuer said in an interview with reporters in the courthouse. “If that’s not a deterrent to you then you’re brain dead.”
In court papers, prosecutors sought 385 years or no less than 50 years. Prosecutors said in a sentencing memorandum that the recommended punishment would be consistent with sentences imposed on “similarly situated” white-collar defendants, such as Bernard Madoff and former WorldCom Inc. Chairman Bernard Ebbers. Madoff, 73, is serving a 150-year sentence for $17 billion in losses and Ebbers, 69, received 25 years for an $11 billion accounting fraud.
Brinkema in court today called a sentence of 385 years “silly.” Patrick Stokes, deputy chief of the Justice Department’s fraud section, told the judge today that the crimes committed by Farkas contributed to the “financial crisis of 2008” and that anything less than a life sentence would send the wrong message. “He killed a bank, Colonial Bank,” Stokes said. “He killed his own company, TBW.”
U.S. Attorney Neil MacBride in Alexandria said the 30-year term “ensures that Lee Farkas will spend the rest of his life in prison.”
William Cummings, one of Farkas’s lawyers, said his client is planning an appeal. He said the actual time Farkas will serve behind bars is about 25 years. Bruce Rogow, a lawyer for Farkas, urged Brinkema to send his client to prison for no more than 15 years....
Six conspirators to the fraud scheme who pleaded guilty have been sentenced by Brinkema to prison terms ranging from three months to eight years.
July 1, 2011 at 11:36 AM | Permalink
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Although this defendant and his co-conspirators contributed to the "financial crisis of 2008", they are a handful of the many who did so.
The question is how many additional prosecutions for mortgage securitization fraud will there be.
I agree that "30 years has a very powerful deterrent message.” But in my opinion the real utility of this sentence is the extent to which it nudges other fraudsters to co-operate.
Posted by: Fred | Jul 1, 2011 5:20:21 PM
No doubt, there is a lot of bogus lawyer gotchas about sharp business practices, in any such case. However, the odds are also good that the total real damage, not just gotchas, exceeded $6 million, the economic value of a human life. The defendants have assassinated an economic life. They should thus be summarily executed on finding of a guilty verdict. The defendants should be allowed to donate any viable or desirable organs if they wish to redeem themselves a little, saving lives to compensate for the economic lives they have taken. Prior to execution, investigators should be allowed to use enhanced interrogation techniques to locate assets, and to solve remaining questions about the matter.
General deterrence really, really violates the procedural due process rights of the defendants. "You are being punished for the speculative future crimes of unknown people." That is ridiculously unfair. The lawyer dumbass is totally unaware, including the Halloween costumed buffoon on the bench. The profession is filled with clueless idiots.
Posted by: Supremacy Claus | Jul 3, 2011 7:47:30 PM
Fictitious sentences violate the Establishment Clause, which prohibits supernatural practices. The sole defense for giving a hundred year sentence would be a belief that medicine may have us live that long, and the judge does not want him released if it does.
Posted by: Supremacy Claus | Jul 4, 2011 7:50:49 AM