Ozark business owner indicted for $6.7 million bank fraud
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced today that an Ozark, Mo., business owner has been indicted by a federal grand jury on charges related to a $6.7 million bank fraud scheme, money laundering and failure to pay taxes.
James E. Ledbetter, 65, of Ozark, was charged in a 14-count indictment that was returned under seal by a federal grand jury in Springfield, Mo., on Oct. 6, 2010. The indictment was unsealed and made public today following Ledbetter’s arrest and initial court appearance.
Ledbetter was the president and executive officer of Ledbetter, Toth & Associates, Inc., as well as Ledbetter, Corner & Associates, Inc., and Ledbetter & Associates, Inc., which were engineering firms based in Springfield that provided engineering and architectural services to municipalities, electrical cooperatives and other entities.
According to the indictment, Ledbetter had a loan factoring agreement with The Bank (which later merged with Signature Bank and is now Bancorp South). Under that agreement, the bank purchased Ledbetter & Associates’s accounts receivables for a percentage of the total amount due. The bank paid for the receivables by issuing an internal credit to the Ledbetter & Associates business account at the bank. The bank then collected payment from the customers listed on the receivables it purchased.
The federal indictment alleges that, from 2003 to 2007, Ledbetter falsely inflated the amount due on dozens of receivables that he sold to the bank. Ledbetter also sold receivables to the bank prior to performing the services reflected in the invoices, the indictment says, and when no services were in fact due to be performed. Sometimes Ledbetter allegedly fabricated the entire invoice to make it appear as though it was a legitimate receivable.
Ledbetter sold the bank approximately $6,770,781 worth of falsely-inflated, fraudulent accounts receivable.
Ledbetter is charged with two counts of bank fraud, three counts of money laundering, six counts of structuring transactions for the purpose of evading federal reporting requirements and three counts of failing to pay to the IRS the federal taxes that he deducted from his employees’ paychecks.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Robyn L. McKee. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.