United States Attorney Richard B. Roper
Northern District of Texas

LUBBOCK COTTON BROKER AND HIS ATTORNEY
PLEAD GUILTY TO FEDERAL CHARGES

LUBBOCK. Texas — Two Lubbock businessmen have pled guilty to federal felony charges related to bankruptcy matters, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. Today, Billie Wayne Spradling, Jr. pled guilty to one count of false account in a bankruptcy case. Last week, his attorney, Steve Claus, who is also a Certified Public Accountant in Lubbock, pled guilty to a misprision of a felony. Both Spradling and Claus entered their pleas before U.S. District Judge Sam R. Cummings who ordered pre-sentence investigations with sentencings to be scheduled after those investigations are completed. Spradling, 49, faces a maximum statutory sentence of five years in prison and a $250,000 fine and Claus, 53, faces a maximum statutory sentence of three years in prison and a $250,000 fine. In addition, as a condition of his plea agreement, Spradling has agreed to pay $196,786.97 in restitution.

In documents filed in Court, Billie Wayne Spradling Jr. admitted that on October 30, 2002, he fraudulently failed to disclose $196,786.96 in assets and income from his cotton brokerage business, ACSI II, in documents he filed in a pending involuntary Chapter 7 bankruptcy case against him. The schedules Spradling and his bankruptcy attorneys filed relied on false business and personal income information. Spradling falsely represented his financial affairs in those schedules to officers of the bankruptcy court, the creditors, the trustee, and the U.S. Trustee.

Spradling admitted that he conducted his business with no distinction between the corporate and personal businesses. He drew no set salary from his corporation, but merely funded his personal expenses by indiscriminately depositing corporate income into his personal accounts, transferring funds among his many accounts, and by paying personal expenses from the corporate accounts.

The documents filed further state that Claus performed legal and accounting work for Spradling in connection with his ownership and operation of ACSI II. He prepared financial statements and tax returns for ACSI II and his represented Spradling and ACSI II though the filing of the involuntary bankruptcy petitions. Although Claus didn’t represent Spradling in thebankruptcy proceedings, the bankruptcy lawyers contacted him regarding the preparation of Spradling’s bankruptcy schedules. Claus had reviewed in detail all of Spradling’s financial information that was in his office and knew that the financial information that was sent to the bankruptcy lawyers was false because they relied on false business and personal income information.

Claus admitted that he knew the schedules were false, and that constituted bankruptcy fraud, and that he concealed it. A misprison of a felony is a crime in which someone has concealed from authorities the fact that a federal felony has been committed. Bankruptcy fraud is a felony. Although mere failure to report a felony is not a crime, a defendant must commit some affirmative act designed to conceal the fact that a federal felony has been committed.

U.S. Attorney Roper praised the investigative efforts of the Internal Revenue Service - Criminal Investigation. The cases are being prosecuted by Assistant U.S. Attorney Paulina M. Jacobo of the U.S. Attorney’s Office in Lubbock, Texas.

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