A Southwest Georgia businessman and owner of a tractor supply company who pleaded guilty to orchestrating a complicated fraud involving millions of dollars of loans by multiple creditors was sentenced to prison and ordered to pay restitution to his victims for his crime.
Rickey Carter, 60, of Nashville, GA, was sentenced to serve 63 months in prison to be followed by five years of supervised release by U.S. District Judge Hugh Lawson, after he pleaded guilty to bank fraud. The court also sentenced Carter to pay more than $6.3 million in monetary restitution to the banks and creditors who were defrauded, as well as to the U.S. Small Business Administration. There is no parole in the federal system.
“Defrauding banks by lying to obtaining millions of dollars in loans undercuts the integrity of the banking system and puts businesses – and the people they employ – in jeopardy,” said Acting U.S. Attorney Peter D. Leary. “Our office and law enforcement will work to hold fraudsters accountable and protect citizens from fraud.”
“This sentencing recognizes the importance of holding the defendant accountable for orchestrating a fraudulent scheme to obtain millions of dollars in loans from these banks,” said Special Agent in Charge Kyle A. Myles of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG). “The FDIC-OIG remains committed to working with our law enforcement partners to investigate financial crimes that threaten the integrity of the banking sector.”
“No matter how elaborate or complicated the fraud scheme, the FBI and our federal partners will uncover and unravel it to protect American citizens and businesses from further damage and work to recoup their losses,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Carter will be held accountable for the damage he has done, sending a message that fraud is a serious crime with serious consequences.”
Carter was the President and CEO of Nashville Tractor (NTI), a business that sold and leased agricultural and construction equipment, attachments and parts. In 2016, he obtained a United States Small Business Administration (SBA) loan with Farmers and Merchants Bank (FMB) in the principal amount of $5,000,000. At the same time, NTI obtained a new line of credit and signed a credit agreement with FMB in the amount of $625,000.
In 2010, Carter had entered into an ongoing Wholesale Financing and Security Agreement with CNH Industrial Capital America, LLC, (CNH) to finance NTI’s purchases of inventory for retail sale or lease. He also entered into a Retail Financing Agreement (RFA) with CNH under which CNH would purchase NTI’s interest in retail installment contracts for the purchase of agricultural and construction equipment with retail customers. The CNH agreement was a primary source of farm and construction equipment inventory for NTI.
Carter was able to continue operations of NTI and other loan arrangements were made with a number of other banks and financing entities. In each instance of a loan with the banks, Carter was required to provide true and complete financial information to the banks and was to provide continuing information for line of credit draws. However, during 2015, NTI began having financial and cash flow issues which made it difficult to make payments due on the loans and to make payroll. During that time, Carter began a practice of selling equipment which it held in trust but not paying the cash over to CNH and other creditors as required. Carter sold at least 88 pieces of equipment valued at more than $1.5 million subject to the security interest of CNH and sold other pieces of equipment securing financing from Kubota Credit Corporation, Ameris Bank, Bank of Alapaha and Diversified Financial Services. As part of the fraudulent scheme, Carter falsified NTI’s financial records in order to inflate the company’s net worth. As a part of falsifying records, on occasion Carter directed NTI employees to generate payments checks on accounts payable but not send the checks, thereby reducing accounts payable but not deducting the checks from NTI’s accounts. In 2016, Carter falsified documents provided to FMB to secure the SBA loan and line of credit.
Carter also created fraudulent retail installment contracts for the sale or lease of numerous items of equipment with CNH using the names of real people whose information was available to Carter. Those fraudulent contracts generated more than $1.2 million in payments to NTI.
Carter continued through the SBA loan period to provide false and fraudulent information. In total, Carter admitted to being accountable for an intended fraud loss totaling more than $3.5 million but not more than $9.5 million. Carter is responsible for restitution for actual monetary losses caused by the fraud to FMB ($1,227,319.66), SBA ($1,500,000), Ameris Bank ($321,934.50), Bank of Alapaha ($150,000), CNH ($2,782,959.99), KCC ($185,993.32) and Diversified Financial Services ($228,399.92).
The case was investigated by the FBI and FDIC-OIG.
Assistant U.S. Attorney Robert McCullers prosecuted the case.