From: <peacethrujustice@aol.com>
Date: Thu, Jun 23, 2011 at 5:19 AM
Subject: [bangla-vision] THREE YEARS - For a Three Billion Dollar Fraud!
Paul Allen, Ex-Mortgage CEO, Sentenced To Prison For $3B Fraud
ALEXANDRIA, Va. — The CEO of what had been one of the nation's largest privately held mortgage lenders was sentenced Tuesday to more than three years in prison for his role in a $3 billion scheme that officials called one of the biggest corporate frauds in U.S. history.
The 40-month sentence for Paul R. Allen, 55, of Oakton, Va., is slightly less than the six-year term sought by federal prosecutors.
"I messed up. I messed up big," Allen told U.S. District Judge Leonie Brinkema before he was sentenced, apologizing to his family and "the entire financial community. "There was no excuse for my behavior."
Allen was chief executive at Ocala, Fla.-based Taylor Bean & Whitaker, which collapsed in 2009 after the criminal investigation became public, resulting in its 2,000 employees losing their jobs. The fraud also contributed to the collapse of Alabama-based Colonial Bank – the sixth largest bank failure in U.S. history – after Colonial bought hundreds of millions of dollars in Taylor Bean mortgages that had already been sold to other investors.
Two other banks – Deutsche Bank and BNP Paribas – lost nearly $2 billion after buying corporate paper from Taylor Bean that was not properly backed with collateral, authorities said.
Taylor Bean and Colonial also tried to obtain more than $500 million from the government's Troubled Asset Relief Program but ultimately never received any funding from the program also known as TARP.
Neil Barofsky, who served as TARP's special inspector general, said the Taylor Bean case was the most significant criminal prosecution to arise out of the nation's financial crisis. The convictions of company chairman Lee Farkas and Allen represent some of the most high-profile executives in the housing and financial industries to receive prison time in the aftermath of the housing sector meltdown.
Allen's lawyer argued for leniency on the theory that Allen was CEO in name only. The real mastermind was Farkas, who kept Allen out of the loop on much of the company's day-to-day operations, according to trial testimony.
"Mr. Allen was not treated as a CEO. He did not function as a CEO," said defense lawyer Stephen Graeff. "Sentence Mr. Allen the man, not Mr. Allen the title."
But Brinkema said Allen's title was significant, adding Allen's reputation in the industry lent credibility to Taylor Bean that it otherwise would not have had. Even worse, Brinkema said, Allen had subordinates who were reporting the problems to Allen, but Allen left them to fend for themselves. One of those Taylor Bean employees, Sean Ragland, also was sentenced Friday to three months in prison and nine months of home detention for his role in the scheme.
"I can't understand why in the world you didn't stop it," Brinkema told Allen. Allen, for his part, apologized to his family and to "the entire financial community."
By the time Allen became CEO in 2003, the fraud was already under way, and Taylor Bean owed more than $100 million to Colonial. Allen's part in the schemes, came later, especially in the commercial paper loans from Deutsche bank and BNP Paribas that eventually grew to become the largest part of the fraud.
Ragland and Allen are the fifth and sixth persons to be sent to prison as part of the Taylor Bean-Colonial fraud, and investigators say the investigation is continuing. Sentences have ranged from three months to eight years.
All six received credit on their sentences for cooperating with investigators and testifying at Farkas' trial.
"Mr. Allen's sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished," said Neil MacBride, U.S. Attorney for the Eastern District of Virginia.
Farkas is to be sentenced next week, and prosecutors have indicated they will seek a significantly longer sentence for Farkas than for his co-conspirators.
Federal Trafficking Penalties - Marijuana
| DRUG | QUANTITY | 1st OFFENSE | 2nd OFFENSE* |
|---|---|---|---|
| Marijuana (Schedule I) | 1,000 kg or more mixture; or 1,000 or more plants | Not less than 10 years, not more than life | Not less than 20 years, not more than life |
| If death or serious injury, not less than 20 years, not more than life | If death or serious injury, mandatory life | ||
| Fine not more than $4 million if an individual, $10 million if other than an individual | Fine not more than $8 million if an individual, $20 million if other than an individual | ||
| | | ||
| Marijuana (Schedule I) | 100 kg to 999 kg mixture; or 100 to 999 plants | Not less than 5 years, not more than 40 years | Not less than 10 years, not more than life |
| If death or serious injury, not less than 20 years, not more than life | If death or serious injury, mandatory life | ||
| Fine not more than $2 million if an individual, $5 million if other than an individual | Fine not more than $4 million if an individual, $10 million if other than an individual | ||
| | | ||
| Marijuana (Schedule I) | more than 10 kgs hashish; 50 to 99 kg mixture | Not more than 20 years | Not more than 30 years |
| | If death or serious injury, not less than 20 years, not more than life | If death or serious injury, mandatory life | |
| more than 1 kg of hashish oil; 50 to 99 plants | Fine $1 million if an individual, $5 million if other than an individual | Fine $2 million if an individual, $10 million if other than individual | |
| | | | |
| Marijuana (Schedule I) | 1 to 49 plants; less than 50 kg | Not more than 5 years | Not more than 10 years |
| Fine not more than $250,000, $1 million other than individual | Fine $500,000 if an individual, $2 million if other than individual |
| Day of Action for Newburgh 4 Sentencing, Demand Justice! |
| Time | Wednesday, June 29 · 8:30am - 1:00pm |
|---|---|
| | |
| Location | Federal Court House 500 Pearl Street New York, NY |
| More Info | For Immediate Release Day of Action: Newburgh 4 Sentencing, Demand Justice! Wed. June 29 8:45am : Press Conference ...500 Pearl Street, New York, NY 10:00am: Pack the Court Room Contacts: Alicia McWilliams: 347 299-4973, aliciamcwllms@yahoo.com Ayesha Hoda: 646-267-5057, hodayesha@gmail.com The entrapment case of the Newburgh 4 reveals the extent to which the government can and has gone in order to manufacture crimes that sustain and reinforce the 'threat' of 'terrorists.' In the Newburgh 4 case, the government implanted informants in the community with the express purpose of inciting and enlisting men to carry out government manufactured 'terrorist' plots--plots that would later be 'foiled' by the government as well. According to "Targeted and Entrapped," a recently released report by the Center for Human Rights & Global Justice (CHR&GJ) at NYU, the horror of the Newburgh 4 case can be located in these four findings: 1) That: the involvement of informants took place without any "previous evidence to suggest that the defendants were planning to commit violent acts before the FBI or NYPD intervened" 2) That: "The government informants not only held themselves out to be Muslims but focused their incitement on Muslims." The focus on the targeting of Muslims is most evident in the government informant's insistence that ALL of the men enlisted in the 'plot' be Muslim. 3) That: "The government's informants aggressively pushed ideas about the violent jihad and even encouraged the defendants to believe that it was their duty to take action against the United States." The government even "provided defendants with- or encouraged the defendants to acquire- material evidence, such as weaponry....which would later be used to convict them" 4) That: "the government relied on the defendants' vulnerabilities—poverty and youth, for example—in its inducement methods." Although the defendants were convicted last October, the NB4 case has brought to the fore several important issues, including the question of government misconduct, racial and religious discrimination and several due process rights issues including the right to a fair trial. Please see CHR&GJ's report, Targeted and Entrapped, for further details about this and other cases involving informants and entrapment, at: http://www.chrgj.org/projects/docs/targetedandentrapped.pdf |
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