A prison gate with keys in the lock
A federal judge sentenced Billy Ray Thomas Jr., a former assistant branch manager at the $1 billion Neches Federal Credit Union in Port Neches, Texas, to 34 months in prison for orchestrating a loan fraud scheme that exploited member accounts to fund fictitious purchases of farm equipment, federal prosecutors said.
During a court hearing last week, U.S. District Court Judge Marcia A. Crone in Beaumont also ordered the 40-year-old to pay $1.36 million in restitution. Thomas is expected to report to prison on May 16. He pleaded guilty to conspiracy to commit bank fraud in April 2024.
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According to court documents, the scheme began in 2015 when Eulice Trey Alvey, then a manager at Oil City Tractors in Beaumont, created fake invoices for non-existent farm equipment. Thomas used those invoices to process fraudulent loan applications at Neches FCU. He used members’ personal and financial information without authorization to secure the loans, which he and Alvey diverted for personal and business use.
To avoid detection, Thomas made cash payments on the loans, court filings said.
The fraud continued until fall 2018, when members began notifying the credit union of loans they had not authorized. Over several weeks, Neches FCU received at least 30 complaints from members who reported loans listed on their accounts were fraudulent.
A Neches FCU internal investigation revealed that Thomas had used family members and acquaintances as borrowers.
Some credit union victims said they never signed paper documents, or only signed electronically on a tablet provided by Thomas. Others said they signed paper documents but did not understand what they were signing because they implicitly trusted Thomas, prosecutors said.
Alvey also pleaded guilty to one felony count of conspiracy to commit bank fraud in August 2024. He is expected to be sentenced on May 28.
Peter Strozniak can be reached at [email protected].
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
