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Former Taylor Bean Chairman Lee Farkas Gets 30 Years in $3 Billion Mortgage Fraud Scandal

By Martin Harris in Consumer Advocacy, Mortgage and Lending
July 1st, 2011

Former Taylor, Bean & Whitaker Mortgage Corp, Lee Farkas was sentenced to 30 years in prison for his role in a $3 billion fraud that has rocked Fannie Mae and Freddie Mac.

Lee Farkas On Thursday, a federal judge sentenced Lee Farkas, former Chairman of Taylor, Bean & Whitaker Mortgage Corp. to 30 years in prison for operating a multi-billion dollar fraud scheme that led to the collapse of the mortgage lender and one major bank.

The first signs of what would eventually lead to a $3 billion fraud surfaced in January 2000, when Fannie Mae executive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else.

Over the next two years, Fannie Mae, the government sponsored enterprise which issues nearly half of all mortgage-backed securities, determined in excess of 200 loans acquired from Taylor Bean were bogus, non-performing or lacked certain critical components such as mortgage insurance.

It has come to the surface, that Fannie Mae officials never reported the fraud to law enforcement or anyone outside the company. Internal memos, public testimony and court papers show Fannie Mae only tried to rid itself of liabilities and cut ties with Taylor Bean.

Fannie Mae’s cutoff, Freddie Mac began picking up Taylor Bean’s business within a week. Freddie Mac soon became Taylor Bean’s largest customer and the mortgage company grew to be one of its biggest revenue producers, accounting for about 2 percent of single-family home mortgages by volume in 2009.

The trial of Farkas and his Taylor Bean cronies resulted in the only major criminal conviction stemming from the financial crisis. A crisis that followed the September 2008 collapse of Lehman Brothers, the US government takeover of Fannie Mae and it’s rival Freddie Mac.



eBay Gives Boost to Chinese Sellers

By Brett Goldfarb in Consumer Advocacy
June 23rd, 2011

eBay’s recent acquisition of GSI Commerce had an ulterior motive. That motive was to boost the proliferation of Chinese manufactured goods in the eBay marketplace.

ebay chinaeBay has certainly taken their love affair with Chinese sellers to the next level. eBay marketplace, which is already full of too many Chinese junk products, is planning a full blown Chinese invasion with their recent acquisition of GSI Commerce, an online services company eBay purchased for $2.4 billion.

In a poor economy, one would think a US based marketplace such as eBay would be working to assist their US based merchants but instead, eBay is intent on making it even easier for Chinese junk sellers to peddle their low priced junk wares to US buyers.

Apparently, eBay is gearing up to offer fufillment services aimed at increasing delivery times for Chinese products. No longer will those knock-off sunglasses or counterfeit Air Jordans have to ship from mainland China. The mountains of Chinese junk will be stored in eBay’s newly acquired facilities eagerly awaiting sale to US buyers.

The Wall Street Journal reports :

Later this year, eBay is expected to begin testing a fulfillment service to help the company standardize delivery times for its merchants, the Wall Street Journal reports. The program, which will be a pilot program tested by some U.S. and China-based sellers, involves merchandise storage and shipping.

One goal of the fulfillment service will be to cut down delivery times for eBay sellers in China. It takes an average of 18 days for an item to get from China to the U.S. The company hopes the fulfillment service can cut that time by more than half.

The fufillment services proposed by eBay are yet another feeble attempt by eBay CEO John Donahoe to compete with rival Amazon.

You can count on the fact that these new Chinese fufillment items will be listed on eBay as “Shipping from US” so eBay shoppers will never even know they’re buying Chinese goods.

Here’s what you can expect to find selling on eBay in coming months courtesy of eBay’s increasing love affair with Chinese sellers :

  • Portable baby swings that trap babies upside down
  • Toys with toxic lead paint that poison children
  • Pet food that kills your pet after they eat it
  • Toothpaste that contains diethylene glycol, a constituent of antifreeze
  • Faulty baby carriers that result in injured babies
  • Oscillating tower fans with faulty wiring resulting in fires
  • Circular saws with faulty blade guards that result in cutting users, not wood
  • Bargain priced electric oil heaters that burn down homes
  • Glassware that breaks for no reason, injuring users

If you’re the least bit patriotic and support recovery of the US economy, shopping on eBay should no longer an option.



What is Identity Theft ?

By Martin Harris in Consumer Advocacy
April 11th, 2011

Identity Theft is the fastest growing Internet related consumer crime with over 9 million Americans falling victim every year.

Identity TheftIdentity Theft is a general term for a group of crimes which involves the illegal use of another person’s identity, typically in order to access resources or obtain credit and other benefits in that person’s name. The most common form of identity theft is credit card fraud where a victim’s credit card number is stolen and used by a criminal to make fraudulent purchases or fraudulently access a victim’s bank account to withdraw funds. Victims of identity theft often suffer numerous adverse consequences and in some cases can actually be held accountable for the perpetrator’s actions. Fortunately, most major credit card companies and banking institutions are quick to assist victims in straightening out the mess made by criminals.

Identity Theft is not a new crime, it has been around for ages but the methods used by perpetrators in the information age are what make it even more imperative for consumers to protect their information. In the past, criminals were limited to using methods such as credit card skimmers or rummaging through trash to obtain personal information. These days, with the widespread popularity of the Internet, criminals worldwide have the opportunity to access information on remote computers or systems without needing to be in the same physical proximity of the victim.

According to the non-profit Identity Theft Resource Center, Identity Theft can sub-divided into four particular categories:

1. Financial Identity Theft - Using another’s name and other identifying information to obtain goods and/or services.
2. Criminal Identity Theft - Posing as another when apprehended for a crime.
3. Identity Cloning - Using another’s information to assume his or her identity in daily life.
4. Business / Commercial Identity Theft - Using another’s business name to obtain credit.

Related crimes include illegal immigration, terrorism and espionage. Identity theft may also be a means of blackmail. There are also cases of identity cloning to attack payment systems, such as obtaining medical treatment.

According to the FTC’s Identity Theft Site, Identity Theft is the fastest growing consumer crime with over 9 million Americans falling victim to criminals every year. Conusmers are recommended to monitor their credit reports and credit rating for early detection and prevention of Identity Theft related credit card fraud.

If you like to learn more about Identity theft, please visit the FTC Identity Theft Site.


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