Larry Webb appeared in U.S. District Court Monday and entered a guilty plea to one count of federal bank fraud stemming from the "Living the Dream" investigation.
The former deputy director at the Upper Cumberland Development District will face no prison time nor fine as a result of the plea deal with federal prosecutors. He will be on three years of supervised release as approved by the Court.
Webb has also reportedly agreed to testify against former UCDD Executive Director Wendy Askins as part of the plea deal. Her trial is scheduled for next month in U.S. District Court.
Webb, charged with Askins in a federal indictment with conspiracy, theft of government money, bank fraud, money laundering, and making a false statement, agreed to enter a voluntary plea of guilty to Count Eight of the indictment, charging bank fraud. Court documents obtained by WJLE state that "after sentence has been imposed on the count to which defendant (Webb) pleads guilty as agreed herein, the government will move to dismiss the remaining counts and forfeiture allegations of the indictment."
According to court documents, "The parties understand and agree that the offense to which defendant (Webb) will enter a plea of guilty (bank fraud) carries the following maximum penalties: (a) a maximum term of 30 years imprisonment; (b) a fine not to exceed $1,000,000; (c) a term of supervised release of not more than five years; and (d) a mandatory special assessment of $100 to be deposited into the Crime Victim Fund.
Had he gone to trial on all counts and been convicted, Webb could have faced a potential 220 years in federal prison and $6.75 million in fines.
Askins is accused of diverting hundreds of thousands of dollars of agency money into a million-dollar luxury home in rural Putnam County called "Living the Dream". What was intended to become a home for needy seniors also allegedly became Askins' home.
Although Webb's attorney Ed Yarbrough said he never profited from the scheme, Webb admitted that he was guilty of Count Eight of the federal indictment, which accused him and Askins of securing a $250,000 loan from the Bank of Putnam County "for their own use and benefit" and "falsely representing" that it was for a project that had been approved by the UCDD board of directors."
In pleading guilty, court documents state that defendant (Webb) admits the following facts and that those facts establish his guilt beyond a reasonable doubt:
"At all times relevant to this case, defendant Larry Webb was the Deputy Director of the Upper Cumberland Development District (UCDD), and the Director of the Cumberland Regional Development Corporation (CRDC). UCDD is a quasi-governmental agency responsible for promoting economic development in the Upper Cumberland area. UCDD is governed by a Board of Directors made up of County Executives and Municipal Mayors from within the 14-county Upper Cumberland area of Tennessee. The UCDD office is located in Cookeville."
"Likewise, CRDC is an organization which operates under the UCDD umbrella, and is governed by a Board of Directors comprised of county executives and municipal mayors from within the 14-county Upper Cumberland area of Tennessee. The CRDC Board of Directors has membership separate from the UCDD Board of Directors. In some instances, however, individuals may be members of both the UCDD and CRDC boards. One purpose of the CRDC is to create affordable housing within the Upper Cumberland region."
"On February 23, 2010, Defendant Webb incorporated "Living the Dream/Independent Living for Seniors, Inc." (Living the Dream). While "Living the Dream" had the appearance of being a project approved by CRDC, it was in fact owned and operated by defendant Webb and codefendant Wendy Askins. A portion of the property was intended to be used as an independent living facility, while another portion was used as a luxury home for codefendant Askins."
"In order to partially fund the purchase of the "Living the Dream" facility, defendant Webb and codefendant Askins obtained a loan from the Bank of Putnam County. To obtain this loan, Webb made false statements to loan officers relating to the true nature of "Living the Dream". Specifically, defendant Webb told the loan officers that "Living the Dream" was an approved UCDD/CRDC project. Additionally, Webb presented false documents, including CRDC resolutions dated May 7, 2010 purportedly authorizing a loan application for "Living the Dream" in the amount of $750,000. As defendant very well knew, the CRDC had not approved the "Living the Dream" project, and had not authorized a $750,000 loan application."
"In reliance upon these false statements and representations, the Bank of Putnam County on May 27, 2010 approved a loan in the amount of $250,000 for "Living the Dream". Defendant Webb and codefendant Askins applied the loan proceeds to the purchase of "Living the Dream". The bank would not have approved the loan or disbursed funds had it known UCDD and/or CRDC did not approve of the project or the loan application."
"The bank eventually foreclosed on the property and subsequently recovered all of its loan proceeds."
"At all times relevant to Count Eight of the indictment, the Bank of Putnam County was insured by the Federal Depository Insurance Corporation (FDIC)".