A former CEO of engineering and architectural firms in Springfield has been sentenced to more than five years in prison for a $6.8 million bank fraud scheme, money laundering and failure to pay taxes.
James Ledbetter, 67, of Ozark, was sentenced to five years and three months in federal prison without parole and ordered to pay $4.7 million in restitution to BancorpSouth and $1.6 million to the Internal Revenue Service, according to a news release from the office of the U.S. attorney for the Western District of Missouri.
Ledbetter had served as president and CEO of the now-defunct firms Ledbetter, Toth & Associates Inc., Ledbetter, Corner & Associates Inc., and Ledbetter & Associates Inc., which provided construction design services to municipalities and electrical cooperatives.
On Oct. 11, 2001, Ledbetter entered into a factoring agreement with The Bank, which allowed him to sell accounts receivable from his firms to the bank for operating cash. Through the agreement, Ledbetter sold The Bank the right to collect on contracts he entered with municipalities, electrical cooperatives and other entities. Ledbetter received a percentage of the total invoice amount - usually 80 percent. The agreement gave Ledbetter immediate operating cash, and The Bank would collect payment from Ledbetter's customers to satisfy the full invoice amount, the release said.
According to a March guilty plea, Ledbetter engaged in an approximately five-year scheme to falsely inflate the amount due on several accounts receivable he sold to The Bank - an organization that merged with Signature Bank and later was purchased by BancorpSouth.
Between 2003 and 2007, Ledbetter also sold accounts receivable to the bank when the services reflected in the invoices either hadn't been performed yet or were not due to be performed. On some occasions, he also created fraudulent invoices and passed them off as legitimate, according to the release.
Ledbetter sold the bank roughly $6.8 million in falsely inflated and fraudulent accounts receivable. From his Ledbetter & Associates account at The Bank, Ledbetter transferred $75,000 to another bank account, thus intending to conceal and disguise the source, ownership and control of the proceeds of the fraud scheme.
According to the release, Ledbetter also failed to pay employee payroll taxes to the IRS. He failed to truthfully account for the quarters ending Sept. 30, 2004, Dec. 31, 2004, and March 31, 2005, and his combined tax liability for the quarters was $185,008.
The case was prosecuted by Assistant U.S. Attorney James Kelleher and was investigated by the FBI and IRS-Criminal Investigation.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
