A former Taylor, Bean & Whitaker Mortgage Corp. official reached a plea agreement on a conspiracy charge in what prosecutors said was a $1.9 billion fraud that targeted the U.S. bank-bailout program.
Sean Ragland, 37, is scheduled to appear tomorrow for a plea-agreement hearing in federal court in Alexandria, Virginia, according to the case docket. Ragland, identified in court records as having worked in Taylor Bean’s finance and accounting department, is accused of one count of conspiracy to commit bank and wire fraud.
Ragland, of San Antonio, is the sixth person charged in what the government called a scheme to deceive financial firms and the Trouble Asset Relief Program by covering up shortfalls at the lender. Ocala, Florida-based Taylor Bean was once the largest non-depository mortgage lender in the U.S., according to the U.S. Securities and Exchange Commission.
The fraud contributed to the failure of Colonial Bank, based in Montgomery, Alabama, according to prosecutors.
Four people, including two former Colonial Bank officials, have pleaded guilty and agreed to help prosecute former Taylor Bean Chairman Lee B. Farkas. Farkas, charged with 16 counts of wire, bank and securities fraud, is set to go on trial April 4.
Ragland’s lawyer, Fritz Scheller of Orlando, Florida, said “negotiations are still ongoing” in his client’s case.
Peter Carr, a spokesman for U.S. Attorney Neil MacBride in Alexandria, declined to comment.
Farkas and other conspirators allegedly committed wire and securities fraud in an attempt to secure $553 million in TARP funds for Colonial BancGroup, Colonial Bank’s parent, prosecutors said.
The application for funding included false information, and Farkas caused Colonial BancGroup to file a false report with the SEC, according to prosecutors. Colonial never got the funds.
Alabama regulators seized Colonial Bank in 2009 and the Federal Deposit Insurance Corp. was appointed as receiver. Colonial BancGroup and Taylor Bean, once the 12th-largest U.S. mortgage lender, filed for bankruptcy in 2009.
The cases are U.S. v. Ragland, 11-cr-00162, and U.S. v. Farkas, 10-cr-00200, U.S. District Court, Eastern District of Virginia (Alexandria).
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