May 15, 2015

Odessans Sentenced to Federal Prison in Bank Fraud Scheme

A federal judge in Midland has sentenced the owner and the office manager of Shorts Electric, an Odessa company that provided oilfield and residential electric services, to federal prison in connection with an estimated $400,000 bank fraud scheme announced Acting United States Attorney United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Laurie L. Younger, FDIC Office of Inspector General, Dallas Region, and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.

Appearing before Senior U.S. District Judge Robert A. Junell yesterday afternoon, business owner Lanny Wayne McDorman was sentenced to 21 months in federal prison followed by five years of supervised release and ordered to pay $371,060.07 restitution.

On December 22, 2014, McDorman pleaded guilty to one count of bank fraud. By pleading guilty, McDorman admitted that he and his co-defendant, 46–year-old office manager Justine Jane Woods, knowingly defrauded Commercial State Bank (CSB) from June 2012 until March 2014. According to court records, Shorts Electric had a Business Manager Reserve Account (BMRA) in which CSB would purchase, at a discount, Shorts Electric accounts receivable and transfer the purchase money into the BMRA, thereby allowing Shorts Electric immediate access to operating funds without having to wait for customers invoices to be paid. Full payment on the purchased Shorts Electric invoices would then be obligated to CSB. The defendants created and submitted to CSB numerous fraudulent invoices knowing that those invoices would be uncollectable because they did not represent actual money owed to Shorts Electric.

On February 24, 2015, Judge Junell sentenced Woods to 41 months in federal prison followed by five years of supervised release and ordered her to jointly pay the restitution amount mentioned above.

“Working alongside our law enforcement partners, we will continue to focus on finding, stopping, and punishing those who commit fraud schemes that impact our financial institutions,” stated FDIC-OIG Special Agent in Charge Laurie L. Younger.

“Bank fraud has the potential to cause immeasurable damage to our community,” stated FBI Special Agent in Charge Douglas E. Lindquist. “The FBI will continue to rigorously investigate schemes to defraud financial institutions insured by the FDIC in order to protect the community.”

Assistant United States Attorney John Klassen prosecuted this case on behalf of the Government.