The Department of Justice announced Desiree Brown, a former treasurer at Taylor, Bean & Whitake Mortgage, has pled guilty to taking part in a $1.9 billion fraud that helped lead to the collapse of the mortgage lender and was aimed at scheming $570 million from U.S. taxpayers.

Brown, 45, admitted to conspiring with former TBW chairman Lee Farkas, who had already been charged in the alleged fraud in June. Farkas pled guilty to criminal charges filed by the DOJ on Thursday.

Sentencing is scheduled for June 10 for Brown, who faces a maximum of 30 years in prison.

The Securities and Exchange Commission also charged Brown, a Florida resident, with violations of the antifraud, reporting, books and records and internal controls provisions of the federal securities laws.

"Brown willingly participated with Farkas in a $1.5 billion fraud on Colonial Bank and its investors," Lorin Reisner, deputy director of the SEC's Division of Enforcement, said in a statement "Brown also aided efforts by Farkas to mislead Colonial Bank and its regulators regarding the bank's application for TARP funds."

The DOJ said Brown admitted to taking part in a scheme from late 2003 through August 2009 that defrauded Colonial Bank; Colonial BancGroup; investors in Ocala Funding, including Deutsche Bank (DB) and BNP Paribas; the Troubled Asset Relief Program; and the investing public.

TBW, which at one time was the largest non-depository mortgage lender in the U.S., relied on Colonial Bank to fund the mortgage loans it originated.

Federal regulators seized Colonial Bank in 2009, when Colonial BancGroup and TBW both filed for bankruptcy.

In the scheme, which Brown and her co-conspirators referred to as “Plan B,” the DOJ said Brown admitted to helping generate money for TBW through the sale of more than $1.5 billion in fictitious and impaired mortgage loans and securities from TBW to Colonial Bank.

The SEC alleges Brown helped cause those assets to be falsely reported as high-quality, liquid assets.

To hide the alleged fraud, Brown, Farkas and the unnamed officer created and submitted fictitious loan information to Colonial Bank and created fictitious mortgage-backed securities from the fraudulent loans, authorities said.

The scheme consisted of about $500 million in phony residential mortgage loans and about $1 billion in “severely impaired” loans and securities by the end of 2007, the SEC alleges. Those assets were listed as high-quality assets on Colonial BancGroup’s financial statements.

At the same time, Brown admitting to helping dupe the public into believing Colonial BancGroup had received a $300 million capital infusion that qualified Colonial Bank to obtain $570 million in TARP funds.

Even though the bank never received the infusion, the announcement sent its stock surging 54% -- its largest one-day rise since 1983, the SEC said.

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