posted October 14, 2008
A 62-year-old Dyersburg, Tn., man has pleaded guilty to bank fraud, mail fraud, and money laundering charges related to the misuse of loan proceeds obtained from the Citizens Bank of Hickman, Ky., and TVA.
Lloyd Aaron Smith entered the pleas in Federal Court.
The loans restricted the use of the proceeds to expenditures related to the operation of a textile plant that Smith and co-defendant, Neal Gordon Wall opened in Hickman, Ky., authorities said. In September 2003, Smith obtained a $5 million loan from Citizens Bank, the proceeds of which were to be used strictly for the operation of the textile plant, Hickman Mills.
Despite that limitation, Smith admitted to expending approximately $134,000 of the loan proceeds to pay off a debt owed by an unrelated business venture.
This expenditure of funds was facilitated by the defendant causing fraudulent invoices to be issued to the company, Hickman Mills, which further caused checks to be issued on behalf of those invoices, it was stated.
The funds from those checks were thereafter used to pay off a business loan on which Smith was a personal guarantor.
Smith also admitted to defrauding TVA in November 2003, by obtaining a $500,000 loan from the agency upon representation that the loan proceeds would be used to buy equipment for the Hickman Mills plant. Despite that representation, the defendant used the loan proceeds to pay off an overdraft that existed in an unrelated business account, authorities said.
In addition to the fraud charges, Smith also pled guilty to conducting nine illegal money laundering transactions with the ill-gotten proceeds of the Citizens Bank loan to Hickman Mills. These illegal transactions included the deposit and withdrawal of checks issued from the Hickman Mills account as payment on the fraudulent invoices Smith caused to have been issued to the company.
The maximum potential penalties are 130 years imprisonment, a $2.5 million fine, and supervised release for a period of five years.
The case was prosecuted by Assistant United States Attorney Jim Lesousky, and it was investigated by the Internal Revenue Service, Criminal Investigations, the Tennessee Valley Authority, Office of Inspector General, the United States Department of Agriculture, Office of Inspector General-Investigations, and the Federal Bureau of Investigations.
The plea was entered before Thomas B. Russell, Judge, United States District Court, Paducah, Ky.
.
Smith is scheduled to be sentenced before Judge Thomas B. Russell on Jan. 14 at 11:30 a.m. in Paducah.
The trial of co-defendant Neal Gordon Wall is scheduled to begin on Nov. 3 in United States District Court in Paducah.
| Dining Out | Business | Movies | Focus | About Us |
| Church | Living Well | Memories | Outdoors | Real Estate | Student Scene | Travel |