|Paul Bryant Jr. and Jeff Sessions|
In the first case, which came to light in June, federal authorities arrested Lee Bentley Farkas, of Ocala, Florida, for a series of schemes that led to the collapse of Montgomery-based Colonial Bank. Assuming Farkas actually committed a crime, that is good news. The Farkas trial is set to begin on February 22, 2011, in Alexandria, Virginia.
The second case goes back to 1997--and in that one, there is little doubt a crime was committed. A federal jury convicted a Philadelphia lawyer and entrepreneur named Allen W. Stewart on 135 fraud-related counts. A significant chunk of those counts involved a scheme that Stewart concocted with Alabama Reassurance, a company that was owned by prominent Tuscaloosa bussinessman Paul Bryant Jr.
But did the federal government go after Alabama Re the way it is going after Lee Farkas and his now-defunct mortgage company, Taylor Bean and Whitaker? Nope. In fact, Paul Bryant Jr., son of the late Hall of Fame football coach Paul "Bear" Bryant and a member of the University of Alabama Board of Trustees, quietly liquidated Alabama Re roughly two years ago.
In other words, a company that had admitted assets of more than $238 million--and had been implicated in a $15 million fraud scheme in Pennsylvania--essentially went away. And apparently not a word was written about it in the mainstream press.
Meanwhile, the Lee Bentley Farkas story is all over the news, with The Washington Post turning out a major piece on it.
To be sure, Farkas appears to have been involved in some serious hanky panky. Reports the Post:
Earlier this week, federal authorities arrested Farkas, 57, accusing him of covering up losses at his firm and creating fictitious mortgage assets, among other scams. He also is accused of trying to defraud the Treasury Department of $553 million from its rescue fund for banks. Farkas, through his attorney, has denied wrongdoing.
The FHA and Ginnie Mae could potentially get hit with more than $3 billion in losses, said Kenneth Donohue, the Department of Housing and Urban Development's inspector general. FHA and Ginnie Mae halted business with Taylor Bean in early August. The company shut down one day later.
Those are serious dollars, and that involves the criminal side of the case. There is a civil side, as well:
The Securities and Exchange Commission launched a civil case this week against Taylor Bean. It is seeking the return of ill-gotten gains and penalties plus interest from Farkas and his company, though the court handling the case has not yet set dollar amounts. The court also will decide whether that money will go to Treasury or a fund that repays investors harmed by such scams.
We applaud the feds for investigating and prosecuting what appears to be a shameful case of financial fraud--one that started in Florida and reached deep into Alabama.
But what about that other case, the one that started in Pennsylvania and reached deep into Alabama, in the direction of Tuscaloosa? Certainly the $15-million scheme between Allen W. Stewart and Alabama Re pales in comparison to the numbers, in the billions, being thrown around in the Farkas-Colonial Bank case.
But $15 million is not financial chopped liver. And the case had serious fallout, leaving thousands of Americans with worthless life-insurance policies.
Also, who knows how many other schemes Alabama Re might have been involved in. Sources tell Legal Schnauzer that federal investigators had been told that, once a conviction was gained in the Stewart case, they were free to go after Alabama Re.
Someone in the chain of command, however, called off the Alabama Re investigation. And that was done even though a federal jury in Pennsylvania had found the company was involved in financial fraud connected to Allen W. Stewart.
It's almost as if Paul Bryant Jr., due to his family's fame and influence, had a protector in the Justice Department, someone who made sure no one would scrutinize Alabama Re's activities too closely.
That's the kind of protector Lee Bentley Farkas probably wishes he had about now.
Is that how "justice" in America works? If you have the right connections, you can pull all sorts of shenanigans and never have to be held accountable?
Based on two cases with strong Alabama connections, it sure looks that way.