WASHINGTON (Reuters) – The former chief executive officer of bankrupt Taylor, Bean & Whitaker Mortgage Corp pleaded guilty on Friday to his role in a $1.5 billion fraud scheme that contributed to the company's collapse.

The U.S. Justice Department said Paul Allen, who joined TBW in 2003 as its CEO, entered the plea in federal court in Alexandria, Virginia, to one count of conspiring to commit bank and wire fraud and to one count of making false statements.

Allen, 55, who lives in Oakton, Virginia, faces up to five years in prison on each count. The judge set sentencing on June 21.

He appeared before Judge Leonie Brinkema, who already has heard a number of other TBW executives admit wrongdoing in one of the biggest fraud cases so far in the U.S. mortgage meltdown.

Under his plea deal with prosecutors, Allen agreed to cooperate, a department spokesman said.

The latest plea occurred right before Monday's scheduled start of a trial of former TBW Chairman Lee Farkas, who faces criminal charges related to the losses at the company.

At a hearing on Friday, Brinkema said she planned to select a jury and hear opening arguments on Monday. Prosecutors told her they were dismissing two wire fraud counts of the 16-count indictment against Farkas "in the interest of moving the trial along," the spokesman said.

TBW's collapse also contributed to the downfall of one of the 50 largest U.S. banks, Alabama-based Colonial Bank, which had sought funds from the federal bank bailout program, the Troubled Asset Relief Program.

Both companies filed for bankruptcy protection in August 2009.

Other TBW executives who have pleaded guilty include former president Raymond Bowman; former treasurer Desiree Brown; and Sean Ragland, a former senior financial analyst. Executives from Colonial Bank also have pleaded guilty.

The case is USA v. Allen, No. 11-cr-165, in U.S. District Court for the Eastern District of Virginia.