United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

FORMER LOCAL BUSINESSMAN SENTENCED
TO 65 MONTHS IN FEDERAL PRISON, WITHOUT PAROLE

Also Ordered to Pay Nearly $2,000,000.00 in Restitution

United States Attorney Richard B. Roper announced that Terry Floyd Lundell, age 55, was sentenced yesterday by the Honorable Mary Lou Robinson, United States District Judge, to 65 months imprisonment and ordered to pay $1,966,281.74 in restitution to First Ag Credit, Wheeler Credit Office, Wheeler, Texas, and to First State Bank of Miami, Miami, Texas. Judge Robinson, who departed upward from the United States Sentencing Guidelines, also sentenced Lundell to serve a five-year term of supervised release following his imprisonment. He was immediately remanded to the custody of the U.S. Marshals Service.

Terry Floyd Lundell, a resident of Tucson, Arizona, pled guilty in April 2006 to one count of a twenty five count superseding indictment to making a false statement on a loan, credit application and renewal. According to documents filed in Court, in September 2001, Lundell knowingly made a material false statement and willfully overvalued property and security for the purpose of influencing the action of First Ag Credit, PCA, Wheeler Credit Office, Wheeler, Texas, with its principal office in Lubbock, Texas, and Ag Credit of Texas, PCA, Stamford, Texas, (First Ag Credit) in that the Lundell submitted a false and fraudulent report of grain levels showing overvaluation and inflation of grain at Omega Grain Company, LLC, Wheeler, Texas.

Daryl and Tillie Snelgrooes (the Snelgrooes) owned and operated a grain elevator business in Wheeler, Texas named Omega Grain. They had run Omega Grain for many years but decided to sell Omega Grain and put it on the market. In early 2000, Terry Floyd Lundell responded to their advertisement and the Snelgrooes agreed that PAC Farms, L.L.C., would lease Omega Grain’s grain elevator from Omega Grain. Lundell was the managing member of PAC Farms, L.L.C. During the lease period, the Snelgrooes continued to manage Omega Grain. Ultimately, Lundell and the Snelgrooes agreed upon terms of the sale.

Lundell brought in David Keith Yoakum, an airline pilot from California, to be the actual purchaser of Omega Grain. On or about October 3, 2000, the Snelgrooes sold their grain elevator business to PAC Farms, L.L.C., for $315,600.00. PAC Farms, L.L.C., paid Snelgrooes $5,000 down on the purchase and Snelgrooes agreed to finance the remaining $310,600.00. On the same day, PAC Farms, L.L.C., conveyed or sold the grain business to Omega Grain Company, L.L.C. Yoakum was the managing member of Omega Grain Company, L.L.C.

First Ag Credit is a Farm Credit Administration Institution in accordance with the Farm Credit Act of 1971. Omega Grain, with Yoakum as the signer on the loan, applied for and was awarded a loan from First Ag Credit in 2000 which was renewed through June 2003. The loan, which was to buy and sell grain, was secured by future grain purchases Omega Grain intended to make. Yoakum signed the loan documents but Lundell controlled all operations of Omega Grain.

When Omega Grain was awarded the loan from First Ag, the proceeds of the loan were sent to Lundell and deposited in his account at Citizens Bank in Shamrock (formerly, First National Bank of Shamrock). Lundell solely controlled the Omega bank account. Between August 2000 through June 2003, a total of $2,714,428.46 was deposited from First Ag Credit to Lundell’s Omega account at Citizens Bank pursuant to the loan agreement. A total of $1,620,990.80 was repaid to First Ag Credit from the Citizens account.

Lundell was required to submit grain level reports to First Ag Credit to confirm existing grain contained in the elevator. The Omega Grain business manager also maintained daily corn position reports at the elevator. On September 14, 2001 Lundell provided a written grain report to First Ag Credit that showed the grain level in the Omega Grain elevator to be 343,552 bushels of corn, when in truth, there was actually 63,779 bushels of corn in the elevator. Lundell submitted the grain report intentionally, knowing that it was false; and he did so for the purpose of misleading the First Ag Credit to loan or extend money to Omega Grain.

In addition, in January 2003, Lundell, dba PAC Farms, entered into a loan agreement with First State Bank of Miami, Texas. First State Bank agreed to loan Lundell money for the purpose of purchasing grain. Between January 13, 2003 and March 3, 2003, First State Bank disbursed $295,500.00 to Lundell dba PAC Farms. Lundell was unable to repay the loan and, as a result, First State Miami suffered a loss of $291,710.48.

United States Attorney Roper commended the Federal Bureau of Investigation for its investigative efforts. The case was prosecuted by Assistant United States Attorney Christy L. Drake of the Amarillo, Texas, United States Attorney’s Office.

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