Deloitte Sued $7.6 Billion over Mortgage Fraud

27 September 2011 - Which Way to Pay

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Deloitte Sued $7.6 Billion over Mortgage Fraud

The accounting and consulting giant Deloitte Touche Tohmatsu is fighting allegations over failings when dealing with a mortgage firm, which led to the company’s demise during the housing crash in the US. Deloitte stands accused of missing fraudulent activity in Taylor, Bean & Whitaker (TBW) during audits. The complaints have been filed by a trust that was overseeing the mortgage firm in a Florida court. The trust was also a subsidiary to TBW and is claiming a total of $7.6 billion in losses.

Taylor, Bean & Whitaker was shut down following raids of its HQ by federal agents in August 2009. Jonathan Gandal, spokesman for Deloitte, has refuted the accusations, dismissing them ‘utterly without merit’. The reported fraudulent activity at the mortgage firm started in 2002, continuing until its closure in 2009. Seven Taylor, Bean & Whitaker executives received varying sentences for federal criminal charges, the chairman of the firm, Lee B Farkas, receiving a 30 year jail sentence.

The current lawsuit against the accountancy company claims that the certifications from Deloitte of the books of TBW played a bit part in giving the mortgage business a legitimate appearance. TBW were hiding bank accounts that were highly overdrawn, as well as selling vastly overvalued or false mortgages and lying about its liabilities. The attorney leading the case against Deloitte has said that the company ‘did not do their job’ and deserves to take some of the wrap.



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