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Group for Colonial Bank and Taylor, Bean & Whitaker Charged for $1.5 Billion Kiting Scheme

The SEC has charged Teresa Kelly and Catherine Kissick from Colonial Bank and Lee Farkas and Desiree Brown from TBW with fraud for their various roles in a seven and half year kiting scheme between Colonial Bank and Taylor, Bean & Whitaker Mortgage Corporation totaling approximately $1.5 billion. The four persons charged worked together to pass off fictitious or impaired securities and loans for high-quality liquid assets. The four collaborated using a method referred to as “kiting” to hide their $15 million dollar per day debts. Kiting is a practice where debits are not entered until after the credits for the following day are entered. Aiding the SEC with their investigation is the Fraud Section of the U.S. Department of Justice’s Criminal Division, the FBI, the Office of the Special Inspector General for the TARP, FDIC’s Office of the Inspector General, the U.S. Department of Housing, the Urban Development’s Office of the Inspector General, and the Civil Division of the U.S. Attorney’s Office for the Eastern District of Virginia. The SEC brought its enforcement action in coordination with these other members of the Financial Fraud Enforcement Task Force.

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