Former Blake’s owner guilty of bank fraud

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imageIf you’re a gay homeowner who’s been ensnared in the mortgage meltdown, do a little ditty today. Just don’t do it at Blake’s, which has tenuous ties to one of the largest and longest-running bank frauds in the U.S. Ouch.

Here’s why you might want to celebrate – at least a little. Lee Farkas (photo), the gay 58-year-old founder and former chair of Taylor, Bean & Whitaker Mortgage Corp., was found guilty Tuesday on 14 counts of conspiracy and bank, wire and securities fraud. It took jurors all of a day to declare guilt for Farkas, who now faces up to 50 years in prison. Insert politically-incorrect gay prison sex joke here.

Prosecutors say Farkas masterminded a $3 billion fraud involving fake mortgage assets that duped financial institutions, even the federal government, and led to the failure of an Alabama bank. In the process, Farkas pocketed more than $30 million to fund a lavish lifestyle of homes, autos, planes, restaurants and other businesses.

Here’s why you might not want to celebrate at Blake’s: Farkas picked up the bar when it was purchased in 2004 by Thunderflower in a deal that also included Blu and WETbar. At the time Farkas was a manager in the company; Blu and WETbar closed in 2008. Blake’s was not listed among Farkas’ assets during criminal proceedings against him and it’s not clear if the Thunderflower purchase was fueled with cash Farkas pocketed from the mortgage scam.

Blake’s corporate ownership later changed and in the process, grew murkier. A Georgia corporation now does business as Blake’s on the Park and lists its principal office address as a unit on 13th Street in Midtown. Not surprisingly, Blake’s managers wouldn’t clarify the bar’s ownership structure last June when Farkas was indicted.

Farkas took the stand during the trial to explain away the fraud this way: “I didn’t believe at the time I committed any crimes, and I don’t believe now that I committed any crimes.”

Apparently, $30 million buys a bunch of denial and delusion.

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