Colonial Bank and Taylor, Bean & Whitaker

Colonial Bank and Taylor, Bean & Whitaker

Major players involved are, the Montgomery, Alabama based Colonial Bank and the Ocala, Florida based mortgage lender, Taylor, Bean & Whitaker.

Important individuals include:

Colonial Bank’s - Vice President, Catherine Kissick

Operation Supervisor, Teresa Kelly

Taylor, Bean & Whitaker’s - Chairman, Lee Farkas

Chief Executive Officer, Paul R. Allen

President, Ray Bowman

Treasurer, Desiree Brown

The two companies created the Fraud, code named “Plan B”, in an attempt to scam approximately $1.9 billion of federal TARP funds. The fraud includes, $500 million in fake mortgages and $1 billion in toxic mortgages and securities.

In early 2009, due to heavy loan losses, Colonial Bank requested bailout funding from the US Treasury’s Troubled Asset Relief Program (TARP), totaling $540 million. But in order to receive the TARP funding Colonial Bank would have had to come up with $300 million in private equity by March 31st of that year.

On Tuesday, March 31st, Taylor, Bean & Whitaker signed and agreement with Colonial Bank to invest $150 million, half of the amount of private equity need by Colonial. This investment was backed mortgages supposedly held by Taylor, Bean & Whitaker. Colonial Bank would also receive $50 million from other of their customers and another $50 million each by two private equity groups.

On May 26th of 2009, both organizations filed to amend their earlier agreement. The amendment saw Taylor, Bean & Whitaker upping their investment in Colonial Bank to approximately $200 million.

In the beginning of June 2009, the FDIC and the Alabama State Banking Department issues a cease and desist order against Colonial Bank.

At the end of July that year it was official that the investment deal between the two organizations was no more. Both groups withdrew themselves from the deal due to the fact that the expected closing...