A Minnesota soybean exporter was indicted by a federal grand jury this week in an alleged scheme to defraud Olmsted National Bank in Rochester.
The criminal indictment charges David Michael Wilcox with three counts of bank fraud and two counts of making false statements.
Wilcox owns and operates two Minnesota corporations: Verified Grains Inc., a soybean export business; and Global Processing Inc., a soybean processor.
Wilcox allegedly received a line of credit from Olmsted National Bank through a specific Small Business Administration program that limited use of the money to export activities. It also required applicants to provide truthful information regarding their financial condition, loan purpose and other information, including any liens and judgments pending against them.
The Greenway Cooperative Service Co. sued Wilcox for breach of contract in 2008, yet he did not disclose that information when he applied for and received a $1.6 million line of credit from Olmsted National in 2010, according to the indictment.
The government also alleges that Wilcox did not provide that information when he renewed and increased his line of credit three times to $3.5 million between 2011 and 2013.
The indictment also alleges that Wilcox spent more than $400,000 from the line of credit in early 2013 to pay for construction of soybean storage facilities owned by his other company, Global Processing, although transferring money and using it for non-export purposes was not allowed under the rules of the SBA-guaranteed program.
The indictment said that after Olmsted National discovered the previous lawsuit in May 2013, it froze Wilcox’s line of credit and called the loan due in May 2013.
Bank officials have since been able to recuperate a portion of the outstanding loan, according to the indictment, but Olmsted National and the SBA suffered losses of nearly $1.5 million. The government said it intends to recover that through forfeiture of substitute property if necessary.
Wilcox nor his attorney responded to a request for comment on Wednesday.