Colonial BancGroup Inc. is the parent company of a bank headquartered in Montgomery, Alabama, USA that failed in 2009. It is a financial services company that, through its subsidiaries, provides a variety of services, including retail and commercial banking, wealth management services, banking mortgages and insurance. The company is in the 50 largest banks in the US before its failure and its subsidiary, Colonial Bank, operates 346 branches in Alabama, Georgia, Florida, Nevada and Texas states.
The company encountered problems after it was revealed that they had bought $ 1 billion in mortgages from Taylor, Bean & Whitaker who forged Taylor Bean, in one of the largest fraud cases in history. On August 25, 2009 it was filed for Chapter 11 bankruptcy. Bank assets and branches are sold to BB & T banks under the Federal Deposit Insurance Corporation (FDIC) broker agreement.
Video Colonial Bancgroup
History
The Bank was founded in 1974 in Montgomery, Alabama as the Southland Bancorporation. The company was renamed The Colonial BancGroup, Inc. in 1981.
BancGroup's main activity is to oversee and coordinate the business of its subsidiaries, and provide capital and services to them. BancGroup derives most of its revenue from dividends received from Colonial Bank, its banking subsidiary. Brokerage, Inc., a subsidiary of BancGroup, provides full-service brokerage and brokerage services and investment advice. BancGroup has interests in several residential and commercial real estate developments located in the southeastern United States, as well as two in the Central Texas area.
On January 31, 2006, Colonial Bank sold its stake in Goldleaf Technologies, Inc., which provides Internet and automatic clearing services to community banks.
At the end of the fourth quarter of 2008, Colonial Bancgroup had a 53.4% ​​Texas ratio, up from 25% in the first quarter of 2008.
Taylor, Bean & amp; Whitaker Mortgage Fraud
Between 2004 and 2009 management at Taylor, Bean & amp; Whitaker fraudulently sold a $ 400 million fake mortgage to Colonial with the help of a Colonial bank executive. The fraud scheme was between 2002 and 2009, and involved Catherine Kissick, former senior vice president of the Colonial Bank and head of the Mortgage Warehouse Loan Division of the Colonial Bank, and his co-conspirators, including former Taylor, Bean & Whitaker Chairman Lee Farkas, where they cheat various entities and individuals, including Colonial Bank, Colonial BancGroup, Taylor, Bean & Whitaker, Asset Problem Assistance Program, and public investment.
According to court documents, Taylor, Bean & amp; Whitaker started making overdrafts in his principal bank account at Colonial Bank. Beginning in 2002, Kissick, Farkas, and their conspirator counterparts were involved in a series of fraudulent acts to cover up overdrafts, first by sweeping money overnight from one Taylor, Bean & Whitaker accounts with advantages in others, and then through the fictitious "sale" of mortgage loans to the Colonial Bank, conspirator fraud dubbed "Plan B." Court records show conspirators sending mortgage data to a Colonial Bank for a loan that does not exist or that Taylor, Bean & Whitaker has committed or sold to other third party investors.
Kissick admits he knows and understands he and his co-conspirators have caused Colonial Bank to pay Taylor, Bean & Whitaker for a worthless asset to the bank. As a result, false information is inserted into the Bank's colonial books and records, giving the impression that the bank has an interest in a legitimate mortgage lending pool, whereas in fact, the pools have no value and can not be surveyed or sold.
Fraud causes Colonial BancGroup to submit false financial data materially with the SEC regarding its assets in the annual report contained in Form 10-K and the quarterly filings contained in Form 10-Q. The false financial data of Colonial BancGroup material includes assets that are too large for a mortgage loan that does not have the slightest value.
Total fraud will cost colonial more than $ 1.9 billion.
Disclosure and failure
Colonial revealed his legal issue on August 4, 2009, stating that federal agents had executed a search warrant at his mortgage warehouse lending office in Orlando, Florida and that it had been forced to sign a stop and stop order with the Federal Reserve and regulators at the end of last month in connection with the practice accounting and loss recognition. On August 14 it was announced that BB & T would purchase branches and Colonial deposits in deal with FDIC.
This is the biggest bank failure of 2009. By August 25, Colonial BancGroup filed for Chapter 11 bankruptcy. The name of the bankruptcy case was "In re Colonial BancGroup Inc, US Bankruptcy Court, Alabama Central District (Montgomery), No. 09-32303".
Demand of PricewaterhouseCoopers
Bankruptcy trust for Taylor, Bean & amp; Whitaker Mortgage Corp., once one of the largest private mortgage companies in the country, is suing PricewaterhouseCoopers as a Colonial Bank auditor, seeking a $ 5.5 billion loss. The alleged guardian in the 2013 suit that PricewaterhouseCoopers neglected in did not detect a massive scam scheme that dropped Taylor, Bean & amp; Whitaker, which led to the collapse of Colonial Bank 2009, the bank Montgomery, Ala. With assets of $ 25 billion, one of the largest US banks collapsed during the Great Recession.
A closely watched case can cause billions of dollars in damage depending on how a juror answers a fundamental question in accounting: How much responsibility does the auditor have for catching fraud? The lawsuit has been settled for an undisclosed amount in August 2016.
PricewaterhouseCoopers has maintained in court documents that its responsibility is to follow accounting principles - which may not always detect fraud. But in a pretrial report issued by the trustee, PricewaterhouseCoopers former chairman Dennis Nally was quoted in a 2007 Wall Street Journal article saying that "the audit profession always has the responsibility to detect fraud."
Maps Colonial Bancgroup
References
Source of the article : Wikipedia
0 Comments