Four charged in alleged Central Kentucky bank fraud involving $40 million

A loan officer and three others took part in efforts to defraud several Central Kentucky banks of more than $40 million, a federal grand jury has charged.

The grand jury indicted Daniel Sexton, Jonathan Williams, Joseph Tobin and Sheila Flynn on one charge each of conspiracy and 23 counts each of carrying out the scheme, or attempting to do so, from May 2006 to September 2010 at banks in Fayette, Woodford and Harrison counties.

The indictment said members of the conspiracy received millions in loans or loan renewals by making false representations or omissions on loan documents.

The banks listed in the indictment are PBI Bank, formerly called Paramount Bank; Community Trust Bank; Farmers Deposit Bank, formerly called Farmers National Bank; Forcht Bank; and Central Bank.

The indictment said Sexton, Williams and Flynn operated various businesses, including DS Realty, DES Equipment, Waste Management Solutions, Georgetown Mobile Estates, and Mobile Home Sales of Central Kentucky.

Tobin was loan officer at PBI Bank from July 2006 to September 2010, the indictment said.

In one instance, Sexton, Williams and Tobin put false information in an application in January 2008 to induce PBI Bank to give a $4.25 million loan to Williams, when the real beneficiaries were Williams and Sexton, the indictment charged.

The two allegedly used the loan for purposes other than those listed in the application.

In another instance, the indictment charged that from November 2008 to April 2010, Sexton and Williams submitted false information to Central Bank in an effort to get a $13.6 million loan. The indictment did not say the bank issued the loan. Central Bank officials said the loan application was not approved, and no loan was issued.

The charges carry a maximum prison term of 30 years.

This story was originally published May 9, 2016 at 6:00 PM with the headline "Four charged in alleged Central Kentucky bank fraud involving $40 million."