James E. Ledbetter, 67, was charged in a 14-count indictment in October 2010. He pleaded guilty last March.
On Friday, Ledbetter was sentenced
to five years and three months in federal prison without parole. He's also being
ordered to pay $4,666,888 in restitution to Bancorp South and $1,567,447 in
restitution to the
Ledbetter was the president and executive officer of Ledbetter, Toth & Associates, Inc., as well as Ledbetter, Corner & Associates, Inc., and Ledbetter & Associates, Inc..
Those engineering firms are based in
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Ledbetter entered into a factoring
agreement with The Bank on
This agreement allowed Ledbetter to sell account receivables from his engineering firm to The Bank for operating cash. In essence, Ledbetter sold The Bank the right to collect on the contracts he entered into with various municipalities, electrical cooperatives, and other customers, for a percentage of the total invoice amount (usually 80 percent). This gave Ledbetter immediate operating cash. The Bank then collected payment from Ledbetter's customers for the full invoice amount.
Ledbetter admitted that, from 2003 to 2007, he falsely inflated the amount due on dozens of receivables that he sold to The Bank. Ledbetter also sold receivables to The Bank prior to performing the services reflected in the invoices, and when no services were in fact due to be performed. Sometimes Ledbetter fabricated the entire invoice to make it appear as though it was a legitimate receivable. Ledbetter sold The Bank approximately $6,770,781 worth of falsely-inflated, fraudulent accounts receivable.
Ledbetter transferred a total of $75,000 from this Ledbetter & Associates account at The Bank to another bank account, knowing that the funds were the illegal proceeds of the bank fraud scheme. By conducting the transaction, Ledbetter intended to conceal and disguise the source, ownership, and control of the proceeds of the unlawful activity.
Ledbetter also admitted that he
collected payroll taxes from his employees but failed to pay those taxes over
This case was prosecuted by
Assistant U.S. Attorney James J. Kelleher. It was investigated by the Federal
Bureau of Investigation and
Ozarks Businessman Indicted for Bank Fraud