United States v. Sean W. Ragland
Court Docket Number: 1:11-cr-162-LMB
The case is assigned to the Honorable Leonie M. Brinkema, United States District Court Judge for the Eastern District of Virginia, United States Courthouse, 400 Courthouse Square, Alexandria, Virginia 22314.
On June 21, 2011, Sean W. Ragland, a former senior financial analyst for Taylor, Bean & Whitaker (TBW), a private mortgage lending company in Ocala, Florida, was sentenced to 3 months in prison, 2 years of supervised release, including 9 months of home confinement, on his March 31, 2011 guilty plea to one count of conspiracy to commit bank and wire fraud (Count 1: 18 U.S.C.§ 371). Restitution will be determined at a later date.
According to a statement of facts submitted with his plea agreement, in 2005, TBW established a wholly owned lending facility called Ocala Funding, which raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas, and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own. Ragland, who had tracking and reporting responsibilities with respect to Ocala Funding, admitted that, from 2006 through August 2009, he and other co-conspirators engaged in a scheme to mislead investors and auditors as to the financial health of the lending facility. According to court records, shortly after Ocala Funding was established, Ragland learned there were inadequate assets backing its commercial paper. Ragland tracked this deficiency, which was referred to internally at TBW as a "hole" in Ocala Funding. He reported the status of the "hole"to senior TBW executives, including its CEO and CFO. Ragland was also aware that TBW co-conspirators were improperly transferring hundreds of millions of dollars from Ocala Funding to TBW accounts. At the time that TBW ceased operations, the "hole" was approximately $1.5 billion. Ragland admitted that, at the direction of other co-conspirators, he prepared documents that inaccurately and intentionally inflated figures representing the aggregate value of the loans held in Ocala Funding or under-reported the amount of outstanding commercial paper. He wired this false information to the financial institution investors, other third parties and an outside audit firm.
In a related case, United States v. Lee Bentley Farkas,
defendant Farkas was convicted after a jury trial in April 2011 on one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; four counts of wire fraud; and three counts of securities fraud. Farkas was remanded into custody after the trial and is scheduled to be sentenced on June 30, 2011 at 10:30 a.m. in Courtroom 600 before Judge Brinkema. Farkas was arrested in June 2010 and charged in a 16-count indictment for his role in the fraud scheme. In February and March 2011, Raymond Bowman,
former TBW president; Desiree Brown,
the former TBW treasurer; Catherine Kissick,
a former senior vice president of Colonial Bank and head of Colonial Bank's Mortgage Warehouse Lending Division (MWLD), and Teresa Kelly,
a former operations supervisor at MWLD, each pleaded guilty to separate criminal informations charging them with conspiracy to commit bank, wire and securities fraud and to their roles in various phases of a fraudulent scheme to defraud financial institutions through the misappropriation of funds. On June 10, 2011, defendant Bowman and defendant Brown were sentenced by Judge Brinkema to 30 months in prison and 72 months in prison, respectively. On June 17, 2011, defendant Kissick and defendant Kelly were sentenced to eight years in prison followed by three years of supervised release and three months in prison followed by three years of supervised release, including nine months of home confinement, respectively.
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Government's Filing with Respect to Restitution
Criminal Information and Statement of Facts