FDIC Hits Colonial Bank Auditors With $1B Negligence Suit

Law360, New York (November 2, 2012, 10:19 PM EDT) -- The Federal Deposit Insurance Corp. on Wednesday sued Colonial Bank's former auditors PricewaterhouseCoopers LLP and Crowe Horwath LLP for the $1 billion that the now-defunct bank lost in the Taylor Bean & Whitaker Mortgage Corp. mortgage fraud scheme.

The FDIC, as receiver for Colonial Bank, claims external auditor PwC and internal auditor Crowe should have learned of the fraud perpetrated by Taylor Bean, the bank's largest client, by 2007 or early 2008, well before the August 2009 federal raid on Taylor Bean's headquarters.

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