Ex-Taylor, Bean treasurer pleads guilty in fraud case

ALEXANDRIA, Va. Feb 24 (Reuters) - The former treasurer of bankrupt Taylor, Bean & Whitaker Mortgage Corp, Desiree Brown, pleaded guilty on Thursday to conspiracy, the first plea in one of the biggest fraud cases stemming from the U.S. mortgage meltdown.

Brown, who eventually rose to become the treasurer from being a receptionist at the large mortgage firm, is expected to cooperate with prosecutors as they pursue criminal charges against the former chairman of TBW, Lee Farkas.

Taylor, Bean & Whitaker filed for bankruptcy in August 2009 and prosecutors have estimated the fraud involves some $1.9 billion and potentially billions of dollars more in losses to federal housing programs.

Farkas has pleaded not guilty to 16 counts of fraud and conspiracy charges. His trial is slated to begin on April 4.

Prosecutors have accused him and unnamed co-conspirators of orchestrating an eight-year scheme that also contributed to the collapse of Colonial Bank, a unit of the now-bankrupt Colonial BancGroup CBCDQ.PK, one of of the 50 largest U.S. banks at the time.

TBW has said in bankruptcy court papers that Brown received more than $1.5 million in bonuses over three years, including more than $700,000 in cash bonuses, another $700,000 to buy a waterfront property and $50,000 for her child's education.

Brown pleaded guilty to one count of conspiracy to commit bank, securities and wire fraud during a hearing before Judge Leonie Brinkema in U.S. District Court for the Eastern District of Virginia.

Prosecutors have said that the scheme at TBW involved efforts by Farkas and others to misappropriate funds from multiple sources. Farkas is also accused of using money to fund a lavish lifestyle, including fancy cars and several homes.

TBW came under scrutiny after authorities became suspicious about a statement by Colonial Bank that it had raised $300 million in a bid to obtain more than $550 million from the federal bank bailout project -- the Troubled Asset Relief Program.

No TARP funds were distributed to Colonial Bank or TBW. (Reporting by Jeremy Pelofsky, editing by Dave Zimmerman)