Virginia: Bellwether Venue for Financial and Securities Fraud Enforcement


On June 15, 2010, Lee Bentley Farkas, the former CEO and Chairman of Florida based Taylor, Bean and Whitaker (TBW), was handcuffed and arrested outside of his health and fitness club, and was sent to the U.S. District Court in Alexandria, Virginia where he was arraigned on a 16-count indictment. Once the head of one of the nation's largest privately-held mortgage lending companies, Mr. Farkas and his coconspirators were charged with conspiracy to commit bank fraud, mortgage fraud, and securities fraud allegedly resulting in $1.9 billion in losses caused to Ocala Funding, Colonial Bank, and the Troubled Asset Relief Program (TARP).

Venue in the Eastern District of Virginia (EDVA) for this Florida-based conduct was predicated largely on allegations that funds and emails were routed by TBW through servers in Richmond and that securities disclosures were filed electronically in Alexandria by Colonial Bank, a theory of venue that has been

previously upheld in the courts.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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