News and Press Releases

Lori Webb Knudsen Sentenced in U.S. District Court

Tuesday, July 31, 2012

The United States Attorney's Office announced that during a federal court session in Great Falls, on July 30, 2012, before U.S. District Judge Sam E. Haddon, LORI WEBB KNUDSEN, a 48-year-old resident of Malta, appeared for sentencing. KNUDSEN was sentenced to a term of:

Prison: 27 months

Special Assessment: $200

Restitution: $948,555.11

Supervised Release: 3 years

KNUDSEN was sentenced in connection with her guilty plea to conspiracy to commit bank fraud and bank fraud.

Assistant U.S. Attorney Carl E. Rostad stated that the government would have proved at trial that Malta area ranchers Steven Lloyd Knudsen and Lori Webb Knudsen defrauded the Belt Valley Bank in their 2005 application for an $813,000 loan in June of 2005 and in a May 2008 application for a $765,500 loan.

The Knudsens had a banking relationship with Belt Valley Bank going back several years before the 2005 loan. When applying for the 2005 loan, and in financial statements submitted in subsequent years to secure annual operating credit, the Knudsens had understated their liabilities and overstated their assets to secure financing. The 2005 loan was guaranteed by the United States Department of Agriculture. The government sought approximately $987,000 in restitution - half that amount being a loss to the Belt Valley Bank and the other half being owed to the Farm Service Agency.

The indictment listed hundreds of thousands of dollars worth of liabilities the Knudsens omitted from their financial statements. The bank relied on the truthfulness of the financial statements to make its judgments as to whether the Knudsen ranching operation was viable and could service the debt created by the loans.

Steven Knudsen pled guilty and is awaiting sentencing.

Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that KNUDSEN will likely serve all of the time imposed by the court. In the federal system, KNUDSEN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.

The investigation was conducted by the U.S. Department of Agriculture - Office of Inspector General.



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