Accountant admits guilt in $40 million Central Kentucky bank fraud case

An accountant pleaded guilty this week to conspiring to defraud several Central Kentucky banks in a case involving more than $40 million in alleged fraud.

Jonathan Williams, who had an office in Nicholasville, pleaded guilty Monday.

The top sentence under the charge would be 30 years in prison. Williams is to be sentenced in February.

Williams was indicted in May along with Daniel Sexton, Joseph Tobin and Sheila Flynn.

Court records say Sexton and Flynn operated several businesses, including DS Realty, DES Equipment, Waste Management Solutions, Georgetown Mobile Estates, and Mobile Home Sales of Central Kentucky.

Williams co-owned or managed the companies and was a co-borrower or guarantor on loans, according to his plea agreement.

Tobin was a loan officer at PBI Bank, formerly called Paramount Bank, from July 2006 to September 2010, the period covered in the charges.

The indictment charged that the four took part in a scheme to submit false financial statements, tax records and appraisals in seeking loans.

Williams admitted he took part in submitting information that inflated the applicants’ income and assets and understated or omitted their debts, improving their chances of getting loans.

Williams said he and the others charged in the case caused banks to issue or renew loans to people who were not the true borrowers, and used money they got from banks for purposes other than what they’d told the banks.

Tobin “enabled and was compensated” for helping in the fraud, Williams said in his plea agreement.

The indictment listed loans totaling more then $40 million that members of the alleged conspiracy applied for, received or renewed.

Several were issued, but the indictment did not say the two biggest were approved. Those were $13.6 million from Central Bank and $13.8 million from PBI Bank.

The loss to the banks covered in Williams’ plea was $2,394,912. The largest amount, at just over $2 million, was from PBI Bank.

The others listed as victims were Community Trust Bank, Farmers Deposit Bank and Forcht Bank.

Flynn pleaded guilty in September to taking part in the fraud. She is scheduled to be sentenced in January.

Sexton and Tobin have pleaded not guilty and are scheduled for trial in February.

This story was originally published November 2, 2016 at 2:23 PM with the headline "Accountant admits guilt in $40 million Central Kentucky bank fraud case."