Paul Allen, Ex-Mortgage CEO Sentenced To Prison For $3B Fraud
ALEXANDRIA, Va. — The CEO of what had been one of the nation's largest privately held mortgage lenders was sentenced Tuesday to more than three years in prison for his role in a $3 billion scheme that officials called one of the biggest corporate frauds in U.S. history. The 40-month sentence for Paul R. Allen, 55, of Oakton, Va., is slightly less than the six-year term sought by federal prosecutors.
"I messed up. I messed up big," Allen told U.S. District Judge Leonie Brinkema before he was sentenced, apologizing to his family and "the entire financial community. "There was no excuse for my behavior."
Allen was chief executive at Ocala, Fla.-based Taylor Bean & Whitaker, which collapsed in 2009 after the criminal investigation became public, resulting in its 2,000 employees losing their jobs. The fraud also contributed to the collapse of Alabama-based Colonial Bank – the sixth largest bank failure in U.S. history – after Colonial bought hundreds of millions of dollars in Taylor Bean mortgages that had already been sold to other investors. ...
Allen's lawyer argued for leniency on the theory that Allen was CEO in name only. The real mastermind was Farkas, who kept Allen out of the loop on much of the company's day-to-day operations, according to trial testimony.
"Mr. Allen was not treated as a CEO. He did not function as a CEO," said defense lawyer Stephen Graeff. "Sentence Mr. Allen the man, not Mr. Allen the title.""Mr. Allen's sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished," said Neil MacBride, U.S. Attorney for the Eastern District of Virginia.
Farkas is to be sentenced next week, and prosecutors have indicated they will seek a significantly longer sentence for Farkas than for his co-conspirators.
http://www.huffingtonpost.com/2011/06/22/m...
"I messed up. I messed up big," Allen told U.S. District Judge Leonie Brinkema before he was sentenced, apologizing to his family and "the entire financial community. "There was no excuse for my behavior."
Allen was chief executive at Ocala, Fla.-based Taylor Bean & Whitaker, which collapsed in 2009 after the criminal investigation became public, resulting in its 2,000 employees losing their jobs. The fraud also contributed to the collapse of Alabama-based Colonial Bank – the sixth largest bank failure in U.S. history – after Colonial bought hundreds of millions of dollars in Taylor Bean mortgages that had already been sold to other investors. ...
Allen's lawyer argued for leniency on the theory that Allen was CEO in name only. The real mastermind was Farkas, who kept Allen out of the loop on much of the company's day-to-day operations, according to trial testimony.
"Mr. Allen was not treated as a CEO. He did not function as a CEO," said defense lawyer Stephen Graeff. "Sentence Mr. Allen the man, not Mr. Allen the title.""Mr. Allen's sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished," said Neil MacBride, U.S. Attorney for the Eastern District of Virginia.
Farkas is to be sentenced next week, and prosecutors have indicated they will seek a significantly longer sentence for Farkas than for his co-conspirators.
http://www.huffingtonpost.com/2011/06/22/m...
