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Man pleads guilty to defrauding bank
Larry Nixon fakes death in 2003 to escape his debt
CourierPress.com
By BILL MEDLEY
September 10, 2005
A man accused of trying to elude his creditors by faking his death in a 2003 boat crash has pleaded guilty to defrauding Old National Bank of $1 million.
Larry Michael Nixon, 56, entered a guilty plea to two counts of bank fraud during a hearing Tuesday in U.S. District Court in Houston. According to court documents, Nixon admitted to using fake documents in order to obtain a loan in 2001 from Old National to purchase construction cranes.
Federal authorities and Old National have said the cranes never existed. Instead, the bank, and a former business partner, M. Gene Marlin, of Greenwood, Ind., claim they depended on phony bills of sale to secure the loans.
Representatives from Old National could not be reached for comment Friday.
According to the U.S. Attorney's Office in Houston, Nixon ran the daily operations of a company called Delta Mike. During Tuesday's hearing, Nixon admitted he sent Delta Mike and his partner, Marlin, false documents, which were submitted to Old National before the loan was approved.
"The United States proved that Old National Bank would not have disbursed the $1 million of its funds if the bank had known that Nixon had not bought the cranes as represented in the documents ...," the U.S. Attorney's Office said in a statement.
The loan originated from an Old National bank location in Indianapolis, the U.S. Attorney's Office said.
In addition to the charge related to Old National, Nixon also pleaded guilty to defrauding Minnwest Bank in Minnesota of $380,000 in a similar scheme involving the sale and purchase of nonexistent cranes.
Previously, Nixon had only faced charges related to his dealings with Minnwest Bank. The two new counts were filed Tuesday and replaced the former charges.
Nixon, who is being held without bond in a federal detention center, faces a Dec. 5 sentencing hearing. Each charge of bank fraud carries a maximum sentence of 30 years in prison and a $1 million fine.
As part of the plea, Nixon also admitted he tried to fake his death in a boating accident in August 2003 while his other company, Delta Crane, was more than $4 million in debt.
A few days before the crash, Nixon used a fake birth certificate he bought on the Internet to obtain a Tennessee driver's license in the name of Patrick Hudgens. Nixon was found and arrested several months later in North Texas on state charges from West Virginia.
When found, Nixon told the Federal Bureau of Investigation that he faked his death because he was unsuccessful in refinancing Delta Crane's outstanding debt.
The U.S. Attorney's Office has also filed a notice for Nixon to forfeit more than $10 million. Prosecutors allege Nixon defrauded Old National out of a total of $6.5 million and Minnwest of about $4 million. But it remains unclear if that money has any chance of being recovered. Nixon is facing involuntary bankruptcy proceedings in Texas and has few remaining assets.
Old National and Marlin have also filed a federal lawsuit against one of Nixon's banks, Moody National of Galveston, Texas, and several of Nixon's former business associates and friends. Nixon is not named as a defendant in that suit.
The lawsuit, which alleges Nixon had help from others to carry out his scheme, is seeking to recover up to $21 million in losses and damages from the defendants. A pre-trial conference is scheduled for Sept. 22.
