Two Former Officers of McSha Properties are Sentenced to Prison
|U.S. Attorney’s Office December 15, 2011|
OKLAHOMA CITY—LARRY C. SHAVER and LEWIS PATRICK COLBERT, both 65 and both formerly of Norman, Oklahoma, have been sentenced to 30 and 24 months in prison respectively for defrauding the federal low-income housing tax credit program, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. These crimes involved using millions of dollars’ worth of false construction invoices to inflate federal low-income housing tax credits and then transferring millions of dollars of resulting financing into their personal bank accounts.
On May 20, 2009, a federal grand jury indicted Shaver, Colbert, and Howard Michael Wampler, each of whom had served as an officer of McSha Properties in Norman. Shaver had been the chief executive officer, Colbert had been the chief financial officer, and Wampler had been a vice president in charge of construction. The indictment related primarily to multi-family housing projects that McSha developed and funded in part through a federal tax-credit program designed to encourage the construction of affordable housing for low-income families. Developers who participate in this program receive 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 fraudulently inflate the construction costs of low-income housing projects. This artificial inflation caused the sham construction companies, which were personally owned by top management of McSha Properties, to receive money fraudulently. It also caused the federal government to allocate more tax credits than it would have if McSha had reported construction costs honestly.
Shaver was 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 Shaver and Colbert 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.
On September 15, 2011, Shaver and Colbert 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 agreed that he played a leadership role in the conspiracy.
Today, Judge Cauthron sentenced Shaver to 30 months in prison. He has already paid $1,143,812.00 in restitution to the U.S. Treasury. Judge Cauthron also imposed a 24-month prison sentence on Colbert, who has already paid $337,560.65 in restitution to the Treasury.
Wampler, the third defendant in this case, will be sentenced in the near future.
These sentences 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 was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Brandon Hale.
Reference is made to the indictment and other public filings for further information.