All language subtitles for American Greed s06e15 Flipping Frenzy Scam Lee Farkas from Taylor.eng

In this episode of American Greed, Lee
Farkas is a fast talker and master

manipulator. Lee was like a cult leader.
He had the charisma of a Gatsby.

He invents fake loans to make his
fortune and funnels millions to support

and fabulous lifestyle.

Lee Farkas turned into a very big fish
in a very small pond. He had a jet.

Houses. Expensive cars.

And he levels anyone who dares to
question him.

Being Farkas. It was the worst kind of
domestic dysfunction.

Farkas' $3 .5 billion scam leaves
thousands jobless and many fighting

foreclosure. You're wondering, why am I
getting a foreclosure notice? We've been

making payments.

His lies lead to one of the largest bank
failures in American history.

It's not a crime to be greedy. It is a
crime to steal money from people. That's

what happened here.

On June 24, 2010, 57 -year -old Lee
Bentley Farkas makes bond and

walks out of a Florida jail.

The once high -flying mortgage mogul is
charged with engineering a series of

massive frauds that have bankrupted his
own company.

For more than a decade, Farkas peddled
fake mortgages and looted his company

tens of millions of dollars, leaving
thousands of innocent homeowners to live

mortgage nightmares.

Jason Moore worked with Lee Farkas for
seven years.

He always said, we have to make.

As much money as possible right now.
Because this will not last forever.

Houses aren't selling.

Credit is scarce.

And risky home loans have led to a
mounting list of bankrupt mortgage

Reporter Nick Timoros has covered
Farkas' story for the Wall Street

He was on trial because he stole from a
bank. He stole from investors.

He did things that were so blatantly
wrong.

you cross a red line at a certain point.

Charged with 16 counts of wire, banking,
and securities fraud, Farkas faces a

sentence of up to 385 years.

Lee Farkas' story begins in Albuquerque,
New Mexico.

His sister, Terry Huber, remembers a
responsible brother consumed with being

respected and successful.

He was very smart as a child.

and always talking about business.

When his father dies, Farkas drops out
of college and at 21 takes a crack at

running the family insurance company.

He didn't think school was that
important, and he felt he had to come

take over my dad's business.

The family business flounders. It seems
insurance isn't young Lee's forte.

In the late 70s, Farkas sells the
business and goes in search of his

Farkas kind of rambled from place to
place. It wasn't really clear what his

great ambition was going to be in life.

By the mid -1980s, Farkas lands in
Ocala, Florida, a sleepy town speckled

horse farms.

Gerald Ergel is the former mayor of
Ocala.

Ocala is known as the horse capital of
the world.

The people here are some of the nicest,
most congenial people that you'll ever

meet.

In largely evangelical conservative
Ocala, Lee lives as an openly gay man.

But residents seem kind and trusting to
this businessman.

He knew that there was a really large
senior population who were looking to

build their dream homes.

Farkas thinks it's the perfect place to
make a killing.

He launches a construction company with
his life partner, Coda Robertson,

backing the money.

At first it did pretty well, but he
started to clash with old O

'Callians, the old guard here, and he
was the new kid in town. He was

he was bold, he was gay, and didn't fit
the typical mold.

In sunny Ocala, residents accuse Farkas
of shady business practices.

Farkas soon finds he's running a failing
business, again.

In late 1989, the company folds.

He racked up a ton of bills.

He had judgments against him left and
right. He was known as a crook.

But Farkas is about to find his calling.

In 1991, he snaps up a little mortgage
company called Taylor Bean and Whitaker,

or TBW, for $75 ,000.

He was flat broke.

He actually got the money to buy the
company from his partner's mother.

Farkas has no formal training in
finance, but he's now running his own

company. In a good month, the business
closes 40 loans, but Farkas thinks he

do better.

He could leverage his quick talking
skills, his ability to think quickly on

feet. By the late 90s, the U .S. housing
market is growing rapidly, and so is

the Internet.

He was like a financial prophet. He
predicted the whole mortgage industry

about to be broken wide open because of
the Internet. And he understood that

those who mastered...

Technology would be ahead of the curve
when it came to originating loans.

selling people on loan products. Farkas
had that, and he was able to make a very

successful business out of it.

Farkas' salesmanship kicks into high
gear.

He expands TBW, opening a dozen branches
in five states.

It was then that Farkas meets 28 -year
-old Cambridge University graduate Jason

Moore at a Florida barbecue and hires
him to spearhead Internet innovations.

He offered me a six -figure salary like
he was handing me a pencil.

I wasn't looking for a job, I wasn't
qualified, but I took it.

By December 2000, TBW was processing
more than 6 ,000 mortgages a year.

And Farkas is acquiring a taste for the
finer things in life.

He stockpiles classic cars, a 65 Shelby
Cobra, a Model A Woody, a

handful of investment homes and party
pads from Key West to Maine.

He also invests heavily in his adopted
hometown, scooping up real estate and

converting dilapidated buildings into
TVW offices.

Locals welcome him as a vital employer.

Lee's goal was to make Taylor Bean and
Whitaker the largest mortgage company in

the world. The jobs that they created
here, that was a huge asset.

In the early 2000s, the housing market
in the United States explodes.

Taylor Bean and Whitaker grew and grew
and grew because this was a great time

be in the business. These were the go
-go years of consumer mortgage lending.

Credit is cheap.

Regulations are loose, and Lee Farkas is
finally successful and respected.

He said, you know what? Now is my time.
I see an industry that I can sink my

teeth into, and I'm going for it.

TBW is independent, a fact Farkas is
fiercely proud of. They would originate

mortgages. They would get loans from
other people, from banks and from other

credit facilities. They would take those
loans and sell them to other investors.

But being independent, TBW lacks the
financial resources of big commercial

and can't hold large amounts of loans on
the books.

Taylor Bean Whitaker wasn't a bank, so
they relied on short -term funding.

To secure TBW's loan money, Farkas
decides to rely on Colonial Bank, one of

largest banks in the Southeast.

An old financial acquaintance, Kathy
Kissick, is vice president at Colonial's

Orlando -based mortgage lending
division.

Farkas' former defense attorney, Bruce
Rogo, knows the history between Kissick

and Farkas.

Lee became the biggest customer of that
division at Colonial Bank, and so he

would call upon her to fund mortgages.

Farkas has dealt with Kathy Kissick long
enough to know she's easy to control.

With Colonial's support, TBW becomes one
of the fastest -growing mortgage

companies in America.

It left many individuals wondering, how
could...

Something happened so quickly. Up next
on American Green, Lee Farkas is

manufacturing loans and shifting funds
to pump up TBW's profits.

It was a combination of hubris and
insanity that left most of us shocked.

By 2002, Lee Farkas' charm and the team
of talented executives he surrounds

himself with have allowed him to grow
Taylor Bean and Whitaker into a mortgage

industry force.

Farkas wants to crush his competition,
and now he's on his way.

He had forethought.

To go to mom -and -pop institutions
across the country and give them the

to get online approvals instantly in a
matter of seconds. It was something that

no other mortgage lender was doing and
made Lee an instant banking rock star.

Farkas sells technology tools to smaller
banks, and they bring their business to

TBW. He has also impressed Fannie Mae,
the government -backed agency that

almost half of all mortgage -backed
securities.

They like his online platform.

and become TBW's biggest client.

How could this maverick transform a
company that was

based in a small town in the sleepy
south to such a level? It was

unparalleled in the mortgage industry.

But behind the scenes, Farkas has big
problems brewing.

As an independent mortgage company, TBW
still needs short -term funds.

Colonial Bank supplies that money.

And two of TBW's accounts at Colonial
Bank are overdrawn.

The deficit is $10 million at first.

That quickly jumps to $100 million.

While Farkas is aware of the overdraft,
only a few of his top executives are

clued in.

Ray Bowman is one of those few.

He quietly starts poring through bank
records.

What Bowman discovers is shocking.

The company isn't charging high enough
fees on the mortgage loans they're

making. And TBW is running in the red on
everything from operating expenses to

payroll. The entire operation, really
from the beginning, was smoke and

Because Lee controlled virtually every
aspect of the company, none of us

individually fully understood what was
going on until it was too late.

But Bowman is loyal.

He caves into the pressure from Farkas
and his secrets stay in -house.

Lee simply said, you're not going to do
anything.

I refuse to fix the situation, and
you're not going to do anything.

Ray was defeated.

He, in the end, felt powerless to act.

If word gets out, Farkas' business could
go under, or worse, he could go to

jail.

But he has a backup plan.

Longtime business associate Kathy
Kissick.

Farkas tells Kissick he needs a favor.

Kissick is willing to help. After all,
TBW is her biggest client.

She agrees to temporarily cover the
shortfall until the missing money is

replaced. The banks do overdraft reports
that Kathy Kissick would move money

from different accounts to cover up the
overdraft.

Kissick and Farkas call the cover -up
operation sweeping.

At the end of each day, Kissick and her
underling in Orlando sweep money from

TBW's profitable accounts into TBW's
master account.

Bank records get processed overnight.

In the morning, colonial executives see
a rosy picture of TBW's balances.

Nobody outside Farkas' chosen circle
knows that...

TBW was overdrawn by more than $100
million.

I think Kathy Kissick had confidence in
Lee and believed that Lee could make all

of this work, and that's why she
continued working with him and helping

supporting him.

For now, the cover -up works, and no one
is asking any questions.

Farkas doesn't seem worried in the least
that he'll be caught.

Tampa Bay Times business columnist
Robert Tregeau isn't surprised by

demeanor. There is a naivete that, gee,
if I did something wrong, I'll get my

hand slapped and we will just carry on.
He's spending weekends in the sunshine,

hobnobbing in style, and hiring eagle
workers for new TBW positions.

People were just absolutely almost
standing in line to go to work at Taylor

and Whitaker.

The pull of Lee Farkas is the incredible
charm and genuine emotion

that he exuded. I mean, he had the
charisma of a Gatsby.

But for all his good guy popularity,
Farkas is also gaining a reputation as a

bullying hothead.

He had a habit of publicly bawling out
colleagues, and he once screamed at his

chief operating officer on a conference
call, what are you, stupid? He once

fired his sister by email.

He rehired her back a short time later.

Those of us on the inside came to refer
to those events as being Farkas.

It was a type of abuse that could only
be described as the

worst kind of domestic dysfunction.

In 2002, it seems Farkas' troubles are
multiplying.

As the sweeping scheme with Colonial
expands, he lands in hot water with

Mae, his crown jewel client.

Fannie Mae discovered that some of the
loans that were coming to them

were not up to snuff and in some cases
completely bogus.

TBW's manufactured loans are clearly
illegal.

But Farkas has a talent for smooth
talking his way out of trouble.

He tells Fannie Mae that subordinates
placed loans that were never meant to be

sold into groups that were sent to
Fannie.

It's all been just a big mistake.

Fannie Mae, the largest buyer of
mortgages in the U .S., says, we're not

to buy mortgages from you anymore. And
that's usually a scarlet letter.

Fannie Mae cuts ties with TBW.

Fortunately for Farkas, they do it
quietly.

The problem was they didn't tell anybody
else about it.

The result was Taylor Bean shifted gears
and went to other government -sponsored

enterprises and essentially continued
their bogus operation with the stamp of

approval of these government entities
for many years.

I negotiated a very smooth transition
between Fannie Mae and

Freddie Mac. I had to publicly state
things that I knew not to be.

True. And in Lee's eyes, he saw that as
a point of strength.

For their silence and loyalty, Farkas
makes Jason Moore his chief operating

officer, and he promotes Ray Bowman to
president.

From that point onward, he operated with
a sense of unbridled power.

Meanwhile, TBW is hemorrhaging money.

The sweeping scheme has become too time
-consuming and risky.

So by the end of 2003, Kathy Kissick
comes up with a new plan.

She calls it Plan B.

She and colonial underlings move TBW's
debt into a special account called Colby

to secretly signify fake loans.

Kathy would say, send me more mortgages.
And Lee would say to his people, find

mortgages that you can send there.

There was not a borrower. There was not
a property attached to a loan. But TBW

needed to create a fake loan so that
Colonial Bank would give us money so

we could then fund real loans coming in
the door.

Laundering TBW's fake mortgage loans
through Colonial is a temporary fix.

But until Farkas can come up with $100
million, the cover -up becomes a

continuous, vicious cycle.

In emails to Kathy Kissick, Farkas
assures her someday they'll be laughing

the situation on a beach.

Kissick's half -joking response, I hope
it's not from prison.

In 2005, Farkas moves most of the
sweeping and Plan B loans over to

Assignment of Trade, or AOT accounts,
where they're bundled into pools.

These bundled pools of loans give Farkas
the perfect cover to shift TBW's fake

loan production into overdrive.

He would go back to loans he had
originated ten years prior, change a few

details. It surprised him how easy it
was. And when he discovered that the

couldn't easily be traced, he just kept
going back year after year after year.

and selling them to multiple investors.

Up next, Lee Farkas hatches a new scheme
to swindle billions more from some of

the richest banks in the world.

He was robbing a bank by using a pencil.
It plays to the

arrogance of Lee Farkas. Clearly, this
was a smart guy.

In 2005, Colonial Bank executive Kathy
Kissick is getting nervous.

She has been inventing or shuffling
worthless mortgages to help Lee Farkas

his losses for more than two years.

Now, more than anything, Kissick
desperately wants out.

If the fraud is uncovered, Kissick could
lose her job or face jail time.

But Farkas' unpredictable mind games are
powerful.

Kissy can't stand up for herself long
enough or loud enough to stop the

bleeding. Lee Farkas would make people
cry the way that he dealt with Kathy,

yelling at her one day, trying to be
nice to her the next day, to try to get

to keep his business afloat, even if it
was through, you know, illegal methods.

The stakes are high for Farkas. On the
books, TBW's profits are soaring.

But huge operating expenses and
undercharging for mortgages are burying

company in debt.

It seems Farkas, the brilliant mortgage
visionary, hasn't paid attention to

dollars and cents details.

Ever. I don't think Lee Farkas should be
penalized for bad business decisions.

I think he should be penalized for
blatant fraud.

Farkas hasn't paid Kissick off to cover
for his schemes. He's made her a

psychological hostage.

She was scared. She was just plain
frightened.

of what had occurred.

Meanwhile, Lee Farkas presents his
company as a paradigm of ethical virtue.

As attorney Paul Singerman explains,
posters and hotline numbers demand

employees to report mortgage fraud.

My favorite is the Forrest Gump
knockoff. All the while, the biggest

of that fraud was Mr. Farkas.

TBW's overdrafts at Colonial keep
deepening by the day.

Farkas owes more than $500 million.

With Kissick keeping quiet, Farkas still
has Colonial as his major cash cow.

But he needs more money, and he needs it
fast.

Lee hatched this idea to approach big
-time investors.

They would give TBW...

$500 million if TBW would securitize
that $500 million with its

own collateral.

So in January 2005, Farkas creates a new
business, Ocala Funding LLC.

Ocala Funding has no employees. It's
wholly owned by Taylor Bean, and it's a

short -term credit facility. It's asset
-backed commercial paper.

Companies use commercial paper to raise
money.

Based on the value of a company's
collateral or assets, investors will

money. Big name banks, including
Deutsche Bank and BNP Paribas, put in

$2 billion to Ocala Funding.

Colonial executives think they have more
than half a billion dollars in loans.

That loan collateral was pure fiction.
It didn't exist.

Ocala Funding was...

Lee's and TBW's personal piggy bank.

It was a scheme of epic proportions.

Farkas says the investor money will
allow TBW to offer more home loans to

everyday people.

Some of TBW's home loans are authentic,
but more are fabricated with made -up

addresses, altered dates, or dollar
amounts.

Most of them are worthless, but hard to
track.

Ocala Funding.

should have had $1 ,750 ,000 or more in

mortgages, and it had almost none.

By 2006, Jason Moore resigns from his
position as chief operating officer, but

stays at TBW in a less prominent role as
a not -for -profit consultant outside

the circle of secrets.

It just became so apparent that he had
become...

someone that i could not rescue um that
i really chose to save myself

next on american greed tbw is tanking
fast but lee farkas has one more

play this time cheating to cash in on
bank bailouts regulators and

begin to say well wait a minute what's
happening here are these really your

loans where is this funding coming from

In 2006, Taylor Bean and Whitaker is one
of America's busiest mortgage lenders.

The company has expanded to more than
two dozen branches in 12 states.

Chairman Lee Farkas has plans to expand
globally.

But the bulk of TBW's home loans are
valueless. That doesn't stop Farkas from

siphoning millions from his own company.

He essentially would run all of his
personal...

expenses through the company.

He simply used that money to fund
whatever he wanted.

Jason Moore can't take the fraud or
Farkas's lies any longer.

In January of 2007, Moore resigns and
walks away with nothing from TBW.

I could no longer turn a blind eye. I
knew that if I didn't leave, it would

consume me.

By 2007, housing sales are drying up and
prices are plummeting.

Yet even with ominous signs of a tanking
economy, TBW seems immune.

The company employs more than 2 ,500
from coast to coast. And in 2008, Fargus

expands into shining new corporate
headquarters, built for $26 million.

When somebody walks into this building,
the first thing they always say is, wow,

this is an amazing building.

It was really a showpiece, something the
community was proud of.

Tracy Dush and her two children, Richard
and Emily, all land jobs with TVW.

And like most employees, they are
impressed with the luxurious new office

Complete with onyx walls, a gourmet
executive dining room, millions in wall

decor.

and a palatial entryway with gel
-infused floors.

I loved going to work every day. I
worked with great people.

My kids would tell you the same thing.
It felt like family.

We were making good money. It was
stressful. You know, it was very high

very high pressure.

But like I said, we had a lot of fun.

As executive chef assistant, Emily Dush
witnesses firsthand how Farkas spares no

expense.

We would get caviar. It was like...

$150 for a jar that was tiny.

I got to cook the pumpkin swordfish, del
sol, ox, eel,

duck, and that was how it was every day.

In Ocala, Farkas earns a reputation as a
philanthropist, donating millions to

local causes.

He had a heart for doing things for the
community.

Marion Theater was a prime example.

Farkas stepped in, $1 .23 million put
into the theater and brought it

back to its original state.

The problem is the gifts being made were
other people's money,

innocent people's money, not Mr.
Farkas's money.

Farkas has masterfully kept his crimes
at TBW clandestine, but the reality of

his business is about to come to light.

In early 2009, Colonial Bank is reeling
from bad investments and the collapse of

the housing market.

But there's a lifeline.

The bank could score $533 million from
the government's Troubled Asset Relief

Program, or TARP.

The Florida housing market was a serious
mess.

Colonial began to suffer.

Financially, it needed to raise capital.

If Colonial goes under...

TBW is dead in the water. Everything has
got to come to light.

If TBW goes under, they're going to blow
the whistle on Colonial Bank.

They're in bed together in a much deeper
way than they have been in the past.

Colonial goes to the Treasury and says,
we'd like to sign up for TARP, please.

And Treasury says, first you need to
raise $300 million on your own.

They want to see that Colonial can make
it before the government's going to put

in even more money.

Farkas sets the wheels in motion for yet
another con.

Lee's reputation as an escape artist
preceded him all his life. He had

out of one sticky situation after
another.

Farkas pledges to raise $150 million for
Colonial and to help get the rest, even

though his own company is drowning.

If he could inject or appear to inject.

Hundreds of million dollars into
Colonial Bank.

This would buy time.

Lee Farkas claims that he has different
investors that are part of this $300

million investment.

And Lee Farkas has to fool people into
thinking that they've actually raised

money. As part of the TARP vetting
process, Colonial also has to open its

to government regulators.

It should be routine.

But right away, TARP agents can tell
something is off.

Way off.

The majority of Colonial's mortgage
lending is devoted only to one company,

Taylor, Bean, and Whitaker.

And TBW's accountant, Deloitte and
Touche, who has given TBW glowing audit

reports since 2002, suddenly won't sign
off on its latest reports.

Investigators sift through thousands of
documents, piecing together a

complicated web of deceit.

Betrayal leads to Colonial Bank
employees and Kathy Kissick.

All lines.

led back to TBW Lounge. There was no way
of concealing what had happened.

When American Greed returns, the feds
have Lee Farkas right where they want

and he has no idea.

It's only going to be a matter of time
before they figure things out.

I don't think so.

In 2009, TARP investigators are planning
their next move.

They know Lee Farkas' attempt to
transfer millions to Colonial Bank is a

reckless last -ditch effort to get $553
million more in TARP bailout funds.

His falsified transactions are computer
-generated and easily traceable.

Once it was eventually discovered that
the $300 million was bogus money,

that disqualified Colonial Bank to
receive a federal bailout. The

rejects Colonial Bank's request for tarp
money.

Like any expert showman knows,
appearances are everything.

Farkas may be panicked, but he doubles
down on his spending.

His Ocala home, like his office, is one
of the finest in town.

It was big and gorgeous.

I mean, the minute you drove up and met
the gate, you knew it was going to be

like you were on MTV Cribs. He has a
seaplane, a $28 million corporate

jet with a private hangar, and is
expanding his empire outside of the

world. Lee dumped countless millions
into a local gym here in Ocala,

several high -end restaurants.

His outside investments were worth in
excess.

of 20 million dollars.

And those funds were taken from
corporate funds.

And he has developed a pension for
carousing.

He opened a string of gay bars in
Atlanta.

He very quickly became known as the gay
entrepreneur.

To those who've known him for years,
Farkas' exploits in and beyond the

boardroom are becoming alarmingly
reckless.

He left his partner of 35 years for
someone much younger. He even bought a

famous strip club in Atlanta. Many of
the strippers were then hired by TBW to

work as account executives.

Observers find his wild swings even more
disturbing than the unpredictable

Farkas of old.

It was almost as if Lee was telling
them, I'm in control of this situation.

There was a parallel between his
personal life and the kinds of schemes

was hatching professionally.

He felt that he was untouchable.

Farkas is making millions at TPW and
tapping millions more.

Yet the revenue stream is all ill
-gotten gains from fake loans and cooked

books. Farkas looted to the extent of
tens of millions of dollars.

TARP investigators, who began with a
routine inquiry, find more evidence of

insecurities fraud by the day.

They ask their FBI partners to turn up
the heat.

By the summer of 2009...

The feds have convinced several of
Farkas' cohorts to flip and become FBI

informants. With home and cell phone
lines tapped, agents listen in to a

call between Farkas and TBW's Ocala
funding president, Desiree Brown.

How are you?

I'm a mess.

I got home last night and there's
business cards from FBI agents on my

You're not obligated to talk to them.

It's only going to be a matter of time
before they figure things out.

I don't think so.

If anybody took the time to look through
the emails, they would eventually

figure it out, Lee.

On August 3rd, federal agents raid
Colonial Bank's Orlando office and

Bean and Whitaker headquarters.

It's the beginning of the end.

Two days after the raid... Tracy Dush
and more than 2 ,000 other TBW employees

are greeted with a mass email.

It said, basically, due to circumstances
beyond our control, this is going to be

your last day. We're shutting down
permanently.

I'm telling you, people were crying.

They were distraught. We had literally
that afternoon, this was 2 o 'clock, to

get our stuff packed and leave.

TBW files for bankruptcy on August 24th.

One day later, Colonial Bank, with $26
billion in assets, goes under.

It's the sixth largest bank failure in U
.S. history.

The FDIC steps in to pick up the pieces.

Back in Ocala, grim reality replaces
shock.

TBW had a huge presence in our
community.

And the day that the Fed shut it down,
it felt like a gut punch. It had

tremendous ripple effects.

Everyone in Ocala knows someone out of
work because of Lee Farkas.

In the Dush family, Tracy and her two
children go into survival mode.

All of a sudden, you know, three of us
are out of work, and money gets tight

really quick.

We were already in a bad economy.
Florida was one of the worst states in

United States at that time, so it was
out of the frying pan and into the fire,

you know? People would go, is there
anything I can do for you?

Yeah, you can pray. I don't know if I'm
going to have food tomorrow. I need

something, a small job, a babysitting
gig.

I'll clean your house.

Anything.

TBW's fallout has left a wake of
foreclosure nightmares for homeowners

the country.

We still get calls fairly often from
people who took out a mortgage.

And that mortgage ended up at Taylor
Bean and was somehow eventually packaged

into securities.

They have no idea what is the status of
their mortgage.

Like Sandy Smith in Stephenville, Texas,
who is fighting to keep the four

-bedroom home she bought in 2007.

We found out later that Taylor Bean and
Whitaker didn't really own our mortgage.

We were told they did.

For months, Smith promptly mailed her
mortgage payment to TBW.

Now, she doesn't know where her money
went.

All of a sudden, you get a foreclosure
notice, and you're wondering, why am I

getting a foreclosure notice? We've been
making payments.

Smith can't get a straight answer on who
cashed her mortgage checks.

She knows that her mortgage note was
packaged into securities, then sold to

multiple banks.

And she's not alone.

TBW did the same thing to more than 500
,000 other homeowners.

As these loans are being sold to
different entities, homeowners are

letters from multiple institutions
saying, this is my loan, no, this is my

no, it's my loan. How can all of these
people want my money all at the same

time? For Smith, who has fought four
foreclosures and even potential eviction

from her home,

Farkas' downfall means little.

She wants the laws to change.

You're not supposed to lose your house,
and you've done everything that you're

supposed to do.

Who's going to enforce those laws?

Do we see the justice system as working?
No, absolutely not.

Up next, prosecutors get ready to hammer
TVW's chairman as Lee Farkas comes face

-to -face with his victims in court.

There were an awful lot of people who
were so...

They had had a good job, and now it just
went up in smoke. A lot of people would

still like to nail his hide to the wall.

On June 15, 2010, federal prosecutors in
Alexandria, Virginia, indict Lee Farkas

after building their case for more than
a year.

He's charged with 16 counts of
conspiracy to commit bank fraud, wire

securities fraud.

Ocala's once favorite son is led away in
handcuffs.

He was ready to fight his battle.

So that just made him stronger,
actually. He was ready to fight for what

thought was right.

Farkas' trial begins in April 2011.

One by one, six co -conspirators who
have cut deals for reduced sentences

testify against Farkas, and prosecutors
present millions of doctored loan

documents as evidence.

Despite all the layers of financial
complexity, the trial lasts less than

weeks. Taylor Bean and Whitaker was Lee
Farkas, and when Taylor Bean and

Whitaker fell, then Lee Farkas was going
to fall.

On April 19, 2011, Farkas is found
guilty of 14 counts of fraud.

Six co -conspirators are also found
guilty.

Their prison sentences range from eight
years to three months.

Kathy Kissick gets eight years for her
role.

Ray Bowman, who kept quiet after
uncovering TBW's massive debt, gets five

Jason Moore, who was never investigated
for any wrongdoing, follows the trials

closely. My friends and former
colleagues who are now in jail and those

who managed to escape, we are left
feeling a profound sense of shame, but

also betrayal.

Prosecutors seek the maximum sentence
against Lee Farkas.

I think there's a tip -off when the
prosecutors are seeking a 385 -year

sentence.

against Lee Farkas, and his attorneys
were thinking more like 15 years.

But on June 30, 2011, the judge hands
down a sentence of 30 years.

For Terry Huber, Farkas' sister, justice
has not been served.

I see people on the news every day that
have killed people, that have raped

people, that have done horrible things,
and they...

go to prison for 10 years, that was a
life sentence for him.

The judge also orders that Farkas
personally forfeit $38 .5 million.

In lieu of cash, prosecutors seize all
of his assets, including his houses and

vintage car collection.

The number pales in comparison to the
staggering amount that investors and

homeowners have lost through years of
Farkas' fake loan scams.

When you add up all of TBW's thefts, Lee
and TBW cheated investors out of about

$3 billion in total.

Back at his Miami law firm, Paul
Sigerman has already started proceedings

against Deloitte & Touche, TBW's old
accountant, who stamped healthy audit

reports for years, hitting the firm with
a $7 .6 billion lawsuit for negligence.

Had Deloitte & Touche done what it
agreed to do, which was to detect fraud.

This could have ended years earlier than
it did.

In a statement to American Greed,
Deloitte and Touche responds that the

defies common sense and maintains that
these claims are utterly without merit.

The Dush family and thousands of former
TBW employees are recovering, but they

know too many are still suffering.

They were real people attached to those
account numbers.

And what was done affected real
families. It really can happen

to anybody, anywhere.

TBW's palatial world headquarters stands
vacant.

Lee Farkas sits in a jail cell at Butner
Federal Penitentiary in North Carolina.

Farkas is scheduled for release in 2041.

He will be 88 years old.

Lee always taught me, don't be too
greedy. Don't be afraid to pay people.

perhaps used our own greed to sign on
for this ride.

His greed, it translated into power.

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