WASHINGTON The former treasurer of the now-defunct Taylor, Bean & Whitaker Mortgage Corp, Desiree Brown, is set to enter a plea agreement to federal criminal charges on Thursday, according to court records released on Tuesday.
No details of the criminal charges were available but U.S. Judge Leonie Brinkema has scheduled a hearing for 9:15 a.m. on Thursday in the U.S. District Court for the Eastern District of Virginia. Such hearings are typically held when a defendant is expected to plead guilty.
Taylor, Bean & Whitaker filed for bankruptcy in August 2009 and federal prosecutors have accused the former chairman of the mortgage firm, Lee Farkas, of orchestrating a scheme that led to billions of dollars in losses that are still being tallied.
Attempts to locate an attorney representing Brown were not immediately successful. If she does enter a guilty plea, it would be the first involving Taylor, Bean & Whitaker, a fraud case that has been estimated to reach almost $2 billion and likely more.
A spokesman for the U.S. Attorney for the Eastern District of Virginia declined to comment.
New executives for the bankrupt company sifting through the remains of the mortgage company have said in bankruptcy court filings that Brown received more than $1.5 million over three years in bonuses and money to buy waterfront property.
An attorney for Farkas said he believed that Brown was cooperating with prosecutors, a move that could help them as they pursue the 16 counts of conspiracy, securities fraud and bank fraud against his client.
"We were expecting (plea agreements by cooperating people) at some point before trial," said Farkas' attorney, William Cummings. The trial for his client is expected to start on April 4.
The Justice Department has come under some criticism from some lawmakers concerned that it has been slow to prosecute senior corporate executives after the collapse of the U.S. housing market, which touched off a global economic slowdown.
Last week, federal prosecutors shelved a criminal investigation into the former chief executive of Countrywide Financial, Angelo Mozilo, after determining his actions did not amount to criminal wrongdoing, a source familiar with the matter said last week.
The case is USA v. Brown, U.S. District Court, Eastern District of Virginia, No. 11-cr-00084.
(Reporting by Jeremy Pelofsky, editing by Dave Zimmerman)