United States Attorney
Northern District of Texas

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

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

LUBBOCK, TEXAS, BUSINESSMAN ADMITS DEFRAUDING
EMPLOYER OF MORE THAN $2 MILLION

LUBBOCK, Tx. — U.S. Attorney Richard B. Roper of the Northern District of Texas, announced that today, in federal court in Lubbock, Donovan Frank Laughlin, a/k/a Donnie Laughlin, pled guilty to an Information charging one count of engaging in monetary transactions in property derived from specified unlawful activity (money laundering). Laughlin, 60, of Lubbock, Texas, had worked as the General Manager at Wool Growers Central Storage Co., Inc., in Ozona, Texas, since 1991. He entered his plea before U.S. District Judge Sam R. Cummings who ordered a pre-sentence investigation with sentencing to be scheduled after that investigation is complete. Laughlin faces a maximum statutory sentence of 10 years in prison, a $250,000 fine and restitution.

Wool Growers operated warehouses that stored mohair and wool until it could be sold. It also acted as an agent and fiduciary for mohair and wool producers. If a producer agreed to sell at an offered price, then Wool Growers collected the sales price, deducted storage and commission costs, and then paid the balance to the producer whose mohair or wool had been sold. Wool Growers, which had mohair and wool storage warehouses in Ozona and Sanderson, Texas, also had a retail business that sold farm and ranch supplies

Laughlin admitted that from March 2000 until late May 2006, he carried out a scheme to defraud Wool Growers by selling their mohair and wool and not paying the producers/owners monies to which they were entitled. While Laughlin did conduct legitimate sales at the direction of an owner/producer, he used that apparent authority, without the knowledge of the owner/producers, to arrange the sale of mohair or wool in storage at Wool Growers.

Instead of deducting storage and commissions from these sales and paying over the balance to the owner/producer of the mohair or wool that was sold, Laughlin would either keep the money himself, or after payment was received by wire transfer or check, transfer the sales proceeds from the mohair/wools sales bank account to the Wool Growers retail business bank account. Then once the money from the fraudulent sales had been transferred and deposited into the Wool Growers retail business bank account, those monies would be used for regular business expenses of the Wool Growers retail business or were fraudulently taken by Laughlin, often in the form of unauthorized additional salary checks and cash.

1 Laughlin transferred approximately $2,072,326.56 to the business checking account. This amount represents the proceeds of the scheme to defraud and money paid by the buyers of mohair and wool for the unauthorized sales. The other monies from the fraudulent sales, once transferred to the business checking account, were used for the ordinary business expenses of Wool Growers retail business. As the general manager, Laughlin benefitted from these payments because they made the retail business appear to be more successful and ensure that his position and authority at Wool Growers would continue.

U.S. Attorney Roper commended the investigative efforts of Texas Ranger Brooks Long and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Roger McRoberts of the Lubbock, Texas, U.S. Attorney’s Office.

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