Federal Judge Sentences Former Irving, Texas Executive to More Than 10 Years in Federal Prison for Defrauding Citicapital Commercial Corporation and GE Capital Commercial, Inc.
Justin Laurin Prather Also Ordered to Pay Nearly $17.5 Million in Restitution
|U.S. Attorney’s Office December 13, 2010|
DALLAS—Justin Laurin Prather, 38, of Lubbock, Texas, formerly of Irving, Texas, who pleaded guilty in August 2010 to one count of wire fraud, was sentenced late Friday by Chief U.S. District Judge Sidney A. Fitzwater to 121 months in federal prison, announced U.S. Attorney James T. Jacks of the Northern District of Texas. In addition, Judge Fitzwater ordered that Prather pay $17,471,678 in restitution and surrender to the Bureau of Prisons on January 25, 2011, to begin serving his sentence.
According to plea documents filed in the case, Prather, a former employee of CitiCapital Commercial Corporation (Citi) and senior vice president of GE Capital Commercial, Inc. (GECC), ran three separate fraud schemes.
In the first scheme, in 2004, Prather began a “securities investment scheme,” in which he solicited money from investors and told them that he had unique access to investment opportunities through Corbin Matthews, a purported broker with Lehman Brothers, Inc. He promised his investors substantial, short-term returns. To further his scheme, he manufactured investment documents to provide to some of the investors and some of the investors even reinvested the “profits” they earned. Prather admits that Corbin Matthews is a fictional person he created to further his fraud scheme.
The second scheme, the “construction equipment scheme,” was built upon the premise that Prather, through his position as senior vice president of GECC, could obtain great deals on construction equipment that GECC obtained from foreclosures and lease returns. In this scheme, Prather purportedly obtained buyers for the equipment, but needed bridge financing to acquire the equipment from GECC before it could be sold to the buyers. Prather asked investors to loan him money to purchase the equipment, and once again, he promised investors substantial short-term returns. Also in this scheme, Prather manufactured investment documents to provide to some of the investors and some investors even reinvested the “profits” they earned. Prather admitted that he never obtained the used construction equipment.
Prather used his third scheme, the “golf car scheme,” to fund the other two fraud schemes. Part of Citi’s and GECC’s legitimate business involved financing golf cars for a number of golf car dealers. In this scheme, Prather used the names of four legitimate golf car dealers (actual clients of Citi and/or GECC) and forged documents reflecting the sale of golf cars to the dealers for which Citi and/or GECC provided financing. Based on these forged documents, Citi and/or GECC transferred funds to accounts associated with Prather, resulting in Prather fraudulently obtaining approximately $12.5 million from Citi/GECC from July 2008 through January 2009.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Keith Robinson.