A Mansfield man will be spending time behind bars for criminal contempt, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Larry Reynolds, 61, pleaded guilty to criminal contempt in February 2021. He was sentenced yesterday to six months in federal prison by U.S. District Judge Jane J. Boyle.
According to court documents, Mr. Reynolds, the former owner and general manager of Mansfield Boat and RV Storage, filed for Chapter 11 bankruptcy in December 2018. The U.S. Bankruptcy Court limited Mr. Reynolds use of cash and collateral and prohibited his business from making payments or reimbursements to himself.
In April 2019, Mr. Reynolds testified that he had withdrawn money from the Mansfield Boat and RV Storage bank account totaling $96,306 to pay for personal items including payments towards his home mortgage. At a subsequent hearing, Mr. Reynolds admitted to transferring and additional $45,000 from the Mansfield Boat and RV Storage bank account against the direction of the Court.
During the course of the bankruptcy proceedings, Mr. Reynolds was found in civil contempt seven times for failing the repay approximately $140,000 in funds that he misappropriated from his business’ bankruptcy estate without court authorization, failing to appear at a scheduled hearing, and failing to comply with accounting and information request by the Court.
In July 2020, the U.S. Bankruptcy Court for the Northern District of Texas referred the case to the United States Attorney’s Office for criminal contempt prosecution against Mr. Reynolds.
The FBI Dallas Field Office conducted the investigation. Assistant U.S. Attorney Shane Read prosecuted the case.