A former Colonial Bank executive pleaded guilty to her role in covering up a billion-dollar scheme, which is considered one of the largest cases of fraud from the nationwide mortgage crisis.
Catherine Kissick, who used to head the now-closed Colonial Bank’s mortgage lending division in Orlando, pleaded guilty to her role in covering up fraud that involved Colonial Bank and Taylor, Bean & Whitaker Mortgage Corp. She could face up to 30 years in prison.
Prosecutors accused Kissick of concealing Colonial’s purchase of hundreds of millions of dollars of fake or problem mortgages from Taylor, Bean & Whitaker. Colonial then listed the mortgages as assets when it applied for $550 million in federal bank bailout funds, prosecutors say.
The scheme was uncovered in August 2009. Kissick is the second person convicted in the case; Taylor, Bean & Whitaker's former treasurer, Desiree Brown, also pleaded guilty to conspiracy to commit fraud.
This is just the tip of the iceberg; we're going to see many more cases like this and, unfortunately, a lot of them of them are going to be in Florida, says Kenneth H. Thomas, an author and banking consultant in Miami. The failure of Colonial Bank was no small matter. It was a huge failure, and it cost taxpayers billions of dollars.
Source: “Former Mortgage Chief Pleads Guilty Ex-Colonial Bank Executive Could get 30 Years,” Orlando Sentinel (March 3, 2011)