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PwC ordered to pay FDIC $625 million in Colonial Bank case

Tammy Whitehouse | July 5, 2018

PwC has been ordered to pay the Federal Deposit Insurance Corp. $625.3 million as a result of unchecked accounting fraud that caused the failure of Colonial Bancgroup Inc.

A ruling by a U.S District Court in Alabama says the FDIC made its case that negligence on the part of PwC caused damages that the FDIC should be entitled to recover. The written opinion also notes PwC may have some setoff rights as a result of a $60 million settlement paid by Crowe to the FDIC.

Colonial Bank was among the 25 largest banks in the United States with more than $26 billion in assets when an accounting fraud was discovered in August 2009 that was intended to help prop up the largest customer to Colonial’s mortgage warehouse lending division, Taylor, Bean Whitaker Mortgage Corp. The fraud began in 2002 using falsified mortgages to address a cash flow problem, and it grew...

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