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The Colonial Bank: Financial Fraud Case

813 Words4 Pages

In 1947 in Montgomery, Alabama a bank was founded by the name Colonial Bank, formerly known as Southland Bancorporation and The Colonial BancGroup Inc. This business proved a diversity of service including wealth management, mortgage banking and insurance, in addition retail and commercial banking. Colonial Bank operated throughout many states to include Georgia, Florida, Texas, Nevada, and Alabama with 346 branches. The company purchased $1 billion in mortgages from Taylor, Bean & Whitaker that had forged, and after that issues and concerns ascended. Colonial Bank was one of the 25 largest banks in the United States and TBW was one of the largest privately-held mortgage lending companies in the United States in 2009.
Taylor, Bean & Whitaker …show more content…

Kissick admitted to conspiring with Lee Farkas, the former chairman of Taylor, Bean & Whitaker, to falsely acquire funding for TBW cover costs related to operations and servicing payments owned to third-party purchaser of loan and/or mortgage-backed securities. On April 2011 Farkas was convicted on 14 counts of frauds and handed a 30-year prison sentence for his role un masterminding the scheme. All accounts were turned over and bought by Branch Banking and Trust Company (BB&T) and deposits in a deal with the Federal Deposit Insurance Corporation (FDIC). Once the largest mortgage companies in the nation, TWD and the bankruptcy trustee, wanted to sue Price Waterhouse Cooper as the auditor of Colonial Bank, seeking $5.5 billion in damages. The trustee alleged in the 2013 suit that Price Waterhouse Cooper was negligent in not detecting a massive fraud scheme that crumble Taylor, Bean & Whitaker, plus assisted in the collapse of Colonial Bank of Montgomery, Alabama in 2009, with more than $24 billion in assets. Price Waterhouse Cooper stated that its responsibility is to follow accounting principles, which may not necessary detect fraud. But in a pretrial brief, the trustee from TBW obtained a quote from the chairman of Price Waterhouse Dennis Nelly in a Wall Street Journal article in 2007, stating that the audit professional has always had a responsibility to detect of

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