A lawsuit alleging over $13 million in bank fraud names a local banker and elected city official in a lawsuit that plaintiffs described as a “Ponzi-style” scheme.
The Bank of San Antonio (TBOSA) filed the lawsuit in the State District Court of Comal County, naming Odessa-based Southwest Bank and bank president Dewey Bryant among 10 defendants who it says played a part in a massive bank fraud conspiracy.
Bryant is also an Odessa City Council member and recently announced his candidacy to be the city’s mayor.
The alleged fraud occurred in an area of the bank’s business called “factoring.” Accounts receivable are purchased for less than their value from businesses needing to improve their cash flow, rather than the businesses waiting on their customers to pay their bills. The bank profits on the difference by collecting the full amount of the invoices from the account debtors.
The suit accuses Ronald “Wayne” Schroeder, a former employee of the bank’s factoring subsidiary, of “inducing” TBOSA into purchasing 10 different accounts owned by Southwest Bank of Odessa and describes how the accounts were fraudulently misrepresented by both Schroeder and Southwest Bank.
Plaintiffs claim the age and viability of invoices was misrepresented, and defendants went so far as to create a fake company to “bait and switch” TBOSA into thinking they were investing in one company while the funds were redirected to another company, to the benefit of Southwest Bank.
“Discovery will soon determine whether … Dewey Bryant … knew or should have known these facts,” the lawsuit states, questioning his involvement and that of five other defendants.
The plaintiffs’ legal counsel told the San Antonio Express-News that invoices that are over 120 days old should not have been made available for sale by Southwest Bank in the first place, and that stale accounts like the ones in question are required to be reported to bank regulators as “charge-offs.”
Southwest Bank not only failed to make the required reports, but they also allowed the accounts to be misrepresented by Schroeder and sold off as viable fresh accounts to TBOSA, among other accusations.
If the allegations are true, plaintiffs say Southwest Bank may, at a minimum, be in “hot water” with bank regulators. Pending depositions should reveal if Bryant and the other defendants named in the suit had any knowledge of the alleged conspiracy. While the lawsuit may exonerate or implicate any of the defendants, the civil suit may not be the end of the issue.
The San Antonio office of the Federal Bureau of Investigation told reporters they are aware of the case but declined to make further comments, citing department policy relating to pending criminal investigations.
Texas Scorecard reached out to Bryant for comment regarding the allegations brought forth in the lawsuit. As of publication, Bryant had not responded. Readers can view the lawsuit here.