Colonial Bank’s Kissick Sentenced in $2.9 Billion Fraud

A former executive of the defunct Colonial Bank, Catherine Kissick, was sentenced to eight years in prison for her role in a $2.9 billion fraud involving Taylor, Bean & Whitaker Mortgage Corp.

Kissick, 50, whose role in the fraud contributed to the failures of Colonial Bank and Taylor, Bean, was sentenced today by U.S. District Judge Leonie M. Brinkema in Alexandria, Virginia, the U.S. attorney for the district said an e-mailed statement.

Kissick, who headed the bank’s mortgage warehouse lending division, pleaded guilty in March to one count of conspiracy to commit bank, wire and securities fraud. Co-conspirator Teresa Kelly, a former operations supervisor at Colonial who reported to Kissick, was also sentenced today to three months in prison, prosecutors said.

Lee Farkas, the ex-chairman of Taylor, Bean on April 20 was found guilty of 14 counts of conspiracy and bank, wire and securities fraud in what prosecutors said at the time was an almost $3 billion scheme involving fake mortgage assets.

Colonial Bank was one of the 25 largest banks in the U.S. and Taylor Bean was one of the largest closely held mortgage lending companies in 2009, according to the statement.

To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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