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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Ohio

Tuesday, June 30, 2015

Mississippi man sentenced to four years in prison for bank fraud

A Mississippi man was sentenced to more than four years in prison for a conspiracy in which he defrauded a Tennesse bank out of $1.2 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, adn Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland office.

Paul D. Allen, 53, of Oxford, Mississippi, previously pleaded guilty to one count of conspiriacy to commit bank fraud.

He was sentenced to 51 months in federal prison and ordered to pay more than $1.2 million in restitution.

Allen, a self-proclaimed entrepreneur and businessman, moved to the Northern District of Ohio in 1999. Prior to that, he lived in Tennessee, where he developed a relationship with Stephen Henry, an unindicted co-conspirator.

Allen and Henry executed a scheme to defraud Oakland Deposit Bank and obtain money and property from the bank by means of materially false and fraudulent representations. The bank was chartered and had offices in Tennessee. Henry served as president of the bank and also served as a loan officer, according to court documents.

Allen contacted several people in Ohio and recruited them to invest in various business projects he promoted, including B-Telecom Incorporated, a purported data-storage company. Allen promised investors they would receive a percentage ownership in the business in return for the investors obtaining loans from the Oakland Deposit Bank in their own names. Allen told the investors the loan proceeds would be used for operating the business, according to court documents.

Between 2003 and 2008, Allen had the investors complete loan documentation in support of the loans, and then submit the loan applications to Henry, or accompany the investors when they submitted the loan applications to Henry. Allen forged borrower signatures on loans for amounts ranging between $42,770 and $168,000. He sometimes took out additional loans in borrowers' names without their knowledge. He used the proceeds to pay personal expenses or to make interest payments on existing loans, according to court documents.

The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation (Cleveland Division, Painesville Resident Agency) and with the assistance of the Geauga County Prosecutor’s Office.

Financial Fraud
Updated February 4, 2016