Deloitte sued for billions over audit of failed US mortgage provider

DELOITTE US HAS BEEN SUED for billions of dollars for allegedly failing to detect fraud during its audit work at collapsed US mortgage firm.

A trust managing the bankruptcy of Taylor, Bean & Whitaker Mortgage Corp (TBW) has filed a claim for a combined $7.6bn (£4.9bn), reported Reuters.

Deloitte had certified the mortgage business as viable with accurate financial statements between 2001 and 2008, which was false, claimed the trustee Neil Luria of Navigant.

Former TBW chairman Lee Farkas was sentenced to 30 years in prison for fraud. He had been accused of covering up large losses at the mortgage company by moving funds between accounts.

The Big Four firm said the claims were “utterly without merit”.

“The plaintiffs in these cases, Taylor Bean & Whitaker and Ocala Funding, were the wholly-owned private companies through which convicted felon Lee Farkas and his co-conspirators committed their crimes. The bizarre notion that his engines of theft are entitled to complain of injury from their own crimes and to sue the outside auditors they lied to defies common sense, not to mention the law. These claims are utterly without merit.”

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