North Texas man faces up to 30 years for $8.6M loan fraud

SHERMAN, Texas (AP) — Prosecutors say a former loan officer in North Texas has pleaded guilty in an $8.6 million scheme involving fake documents and fictitious borrowers.

Michael Shelley of Sherman pleaded guilty Wednesday to bank fraud. The 38-year-old Shelley faces up to 30 years in prison when sentenced at a future date.

Court records show Shelley from May 2016 to mid-2017 worked for Lone Star Agricultural Credit Association in Sherman. Authorities say Shelley created fraudulent loans, without the credit union’s knowledge or authorization, at negative and below-market interest rates and terms.

The scheme involved more than two dozen bogus loans, fictitious customers and unauthorized transfers.

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Authorities didn’t immediately provide details on how the funds were used. A spokeswoman for the U.S. attorney’s office, Davilyn Walston, said Wednesday that prosecutors will seek restitution.