Bank Insider Drains $140,000 From US Government Using Illegally Obtained Customer Information

A former bank executive used his position at the lender to drain more than $140,000 from two US government programs.

The U.S. Attorney’s Office for the Northern District of Texas says Kaylee Ree Lunn, 37, of Holliday, Texas, has pleaded guilty to one count of wire fraud for running a scheme that siphoned government funds via fraudulent Paycheck Protection Plan (PPP) loans.

Court documents show that Lunn abused her position as vice president at the Wichita Falls branch of Prosperity Bank to access customers’ personal and business financial information without their knowledge or consent.

Prosecutors say Lunn used illegally obtained customer data to apply for four PPP loans, as well as a commercial loan between 2020 and 2021, while claiming that the business entities belonged to her husband.

To increase her chances of getting the loans approved, Lunn admitted she faked or inflated the firms’ income and payroll expenses. She also diverted over $276,000 in loan proceeds to accounts under her control. In total, Lunn received over $140,000 in fraudulent PPP loans.

On top of the 48-month prison sentence, Chief United States District Judge Reed C. O’Connor ordered Lunn to pay restitution of $573,444 to the Small Business Administration and over $19,000 to Prosperity Bank, formerly known as First Capital Bank.

The Texas-based Prosperity Bank is the 55th-largest bank in the US with over $38.38 billion in assets, according to the Federal Reserve.

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