Three Former Officers of McSha Properties Plead Guilty to Wire Fraud Conspiracy

OKLAHOMA CITY, OK—LARRY C. SHAVER, 65, of Port Isabel, Texas, and LEWIS PATRICK COLBERT, 65, of Norman, Oklahoma, pled guilty today to conspiring to commit wire fraud by using millions of dollars of false construction invoices to inflate federal low-income housing tax credits, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. A third defendant, HOWARD MICHAEL WAMPLER, 66, of Blanchard, Oklahoma, pled guilty to conspiracy on August 25, 2011.

On May 20, 2009, a grand jury indicted all three defendants, who were officers of McSha Properties in Norman. The indictment related primarily to housing projects that McSha developed and funded in part through a federal tax-credit program designed to encourage the construction of affordable housing. Developers who participated in this program received federal tax credits that can be traded in a national tax-credit market. The amount of the tax credits awarded is based on the cost to the developer of building a housing project that qualifies for the program, which is administered in Oklahoma by the Oklahoma Housing Finance Agency.

The indictment alleged that the defendants used sham construction companies and fictitious construction invoices to inflate fraudulently the construction costs of low-income housing projects. This artificial inflation caused the sham construction companies, which were owned by top management of McSha Properties, to receive money to which they were not entitled. It also caused the federal government to allocate tax credits for these projects in excess of the credits that should have been allocated for the projects actually built. SHAVER and WAMPLER were charged with conspiring to commit fraud from June 3, 2002, to November of 2004, through sham companies called Frankenbury, LLC, and SLEM, LLC. In a separate conspiracy count, the indictment alleged that all three defendants conspired to commit fraud between August of 2003 and August 3, 2006, when the government executed search warrants in Norman at McSha Properties and at the accounting firm of Colbert & Francks. The second conspiracy involved sham companies called MacTeague Construction Company, LLC; WFT Contractors, LLC; and BOKHOMA Construction, LLC.

Today, SHAVER and COLBERT each pled guilty to the second conspiracy count before United States District Judge Robin Cauthron. SHAVER also pled guilty to depositing money from the first conspiracy into a personal bank account with the knowledge that it was the proceeds of crime. Furthermore, SHAVER has agreed that he played a leadership role in the conspiracy. All three defendants have agreed that the loss to the government is between $2,500,000 and $7,000,000.

Judge Cauthron will sentence the defendants on December 15, 2011. Under his plea agreement, SHAVER faces between eighteen and 36 months in prison and could be fined up to $250,000. COLBERT and WAMPLER face a statutory maximum of 20 years in prison and a fine of $250,000. SHAVER and COLBERT have agreed to pay restitution to the United States by September 23, 2011. SHAVER agreed to pay $1,143,812.00; COLBERT agreed to pay $337,560.65. WAMPLER’s restitution will be set at sentencing.

These charges are the result of an investigation conducted by the Criminal Investigation Division of the Internal Revenue Service and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Brandon Hale.