- Associated Press - Thursday, June 30, 2011

Federal authorities say the case against Lee B. Farkas, former chairman of Florida-based Taylor Bean & Whitaker, is one of the largest prosecutions arising from the nation’s financial crisis. The fraud put thousands of employees out of work and contributed to the collapse of Colonial Bank, which authorities described as the sixth largest bank collapse in U.S. history.

“He deserves to be punished severely in light of the enormity of his crimes. The losses from this case are, in fact, off the charts,” federal prosecutor Patrick Stokes said in urging a judge to send Farkas, 58, to prison for the rest of his life.

Farkas, who denied any wrongdoing when he testified at his trial, was convicted in April of all 14 counts, including securities fraud and conspiracy. On Thursday, he acknowledged taking risks and making errors in judgment to keep his company afloat. But did not directly apologize for any fraud.

“When faced with the prospect of Taylor Bean & Whitaker sinking, I had to take risks,” said Farkas, who was taken into custody after the verdict and appeared in court Thursday in a green prison jumpsuit. “I let Taylor Bean & Whitaker get out of control by letting it grow too fast.”

U.S. District Judge Leonie Brinkema told Farkas she detected no remorse as she sentenced him to 30 years - twice the 15-year sentence requested by his attorneys.

The fraud began in 2002 and took multiple forms until Taylor Bean collapsed in 2009 and the scheme unraveled, prosecutors said. Taylor Bean overdrew its main account with Alabama-based Colonial Bank by several million dollars and eventually double- and triple-pledged mortgages it held to a variety of investors. Prosecutors also alleged that Taylor Bean sold hundreds of million in worthless mortgages to Colonial.

They say Farkas was motivated by a lavish lifestyle, maintaining several dozen classic cars, a private jet and seaplane, and multiple houses, including one in Key West. The government is seeking to forfeit $38.5 million.

Farkas‘ lawyer, Bruce Rogow, said prosecutors had magnified Farkas‘ role in the fraud and said that while his client may have made naive or foolish business decisions, he was not a calculating criminal deserving of a life sentence. He said each of Farkas‘ co-defendants deserved blame for allowing the fraud to continue for years.

“He is not the ogre that the government makes him out” to be, Mr. Rogow said,