Man who lost iconic Mississippi mansion in bankruptcy admits to defrauding banks, faces prison time
An ex-Mississippi resident and former owner of one of the state’s most iconic antebellum mansions pleaded guilty to bank and wire fraud charges Monday in federal court nearly two years after he filed bankruptcy amidst crushing debt.
United States Attorney Brandon J. Fremin announced Monday that Michael Allen Worley, age 57, of Baton Rouge, Louisiana, pleaded guilty before U.S. District Judge John W. deGravelles to bank fraud and wire fraud. As a result of his conviction, Worley faces a significant term of imprisonment, a fine and a period of supervised release.
According to admissions made as part of his guilty plea, Worley executed schemes to defraud both banks and private equity firms by submitting multiple false and fraudulent loan applications on behalf of himself and of businesses he owned or operated.
Between 2014 and 2018, Worley obtained more than $18 million in new loans from federally-insured banks in Baton Rouge and around the country through materially false and fraudulent statements and representations.
Through a similar scheme, Worley obtained at least an additional $11 million from private equity firms in Louisiana and Texas, also through materially false and fraudulent statements and representations. During the course of both his bank and wire fraud schemes, Worley inflated his assets, understated and omitted his liabilities, misrepresented his income, and often misrepresented other things including the intended use(s) of millions in loan proceeds.
In some instances, Worley and the businesses he owned, operated, or controlled, defaulted on the loans, causing the financial institutions and private equity funds to suffer financial losses. Worley filed for Chapter 11 bankruptcy in January of 2018.
“This investigation and conviction demonstrates that those who seek to deceive and defraud banks and other lenders for their own personal benefit will be held accountable,” U.S. Attorney Brandon J. Fremin said. “Mr. Worley executed schemes to fraudulently induce banks and private lenders into giving him millions of dollars, and used unwitting associates of his to assist him. Individuals like Mr. Worley who obtain loans through fraudulent means can expect to be prosecuted, and victims of such schemes should know we will do everything within our power to make these lenders whole. I would like to recognize the efforts of our prosecutor and the FBI for their exemplary work on such an important matter.”
At the time of his bankruptcy filing, Worley claimed $107 million in debt, including millions of dollars owed to Natchez-based United Mississippi Bank (UMB).
Worley had led the bank to believe he was financially sound when the bank lent him money against several Natchez properties including teh antebellum mansion known as Dunleith. UMB obtained permission from the bankruptcy court to foreclose on the property and has since been trying to sell it.
Dunleith was built in 1856 and operated as a commercial bed and breakfast facility since 1976. When it closed Dunleith currently had 22 luxury rooms available for overnight guests and has been the venue for many weddings and large parties throughout the years.
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