U.S. Department of Justice
United States Attorney Northern District of Texas
1100 Commerce Street, 3rd Floor Telephone (214)659-8600 Dallas, Texas 75242-1699 Fax (214)767-0978
FOR IMMEDIATE RELEASE DALLAS, TEXAS
CONTACT: 214/659-8600
JANUARY 31, 2006
FORMER SAVINGS AND LOAN CEO CONVICTED
Edwin T. McBirney, III, Convicted on All 27 Counts in Federal Indictment
U.S. Attorney Richard B. Roper announced that following a week-long trial and less than four hours of deliberation, today a federal jury in U.S. District Court in Dallas convicted Edwin T. McBirney, III, on all 27 counts of a superseding indictment that charged him with six counts of mail fraud, 11 counts of making false statements, nine counts of concealing assets from the Federal Deposit Insurance Corporation (FDIC) and one count of money laundering. At a separate hearing the court found that McBirney was subject to $2,054,366 in cash forfeitures. McBirney, age 53, is the former Chief Executive Officer (CEO) of the now defunct Sunbelt Savings of Texas whose insolvency cost taxpayers approximately $1.2 billion, according to the FDIC.
McBirney faces a maximum statutory sentence of 150 years imprisonment and a $7 million fine, in addition fo the forfeitures. He is scheduled to be sentenced by the Honorable Sidney A. Fitzwater on May 12, 2006.
In February 1993, McBirney entered into a settlement agreement with the FDIC, in a case originated by the Federal Savings and Loan Insurance Corporation, abolished in 1989, as receiver for Sunbelt. A judgment in the amount of $8.5 million was entered in that case in favor of the FDIC and against McBirney. McBirney also agreed to pay the FDIC on a schedule based on his annual gross income. Also in February 1993, McBirney was convicted on his plea of guilty to bank fraud and was sentenced to 15 years imprisonment and ordered by the Court to pay $7.5 million restitution to the FDIC and directed that all payments on the FDIC's civil judgment be credited against that restitution.
Later that year, in September 1993, Edwin T. McBirney, III created the Oslin Nation 1993 Trust with a trustee chosen by McBirney, who was the beneficiary of that trust On July 21, 1994, the Court amended the criminal judgment which resulted in McBirney being placed
on probation starting on July 8, 1996. As part of his probation supervision, he was required to submit monthly reports to the United States Probation Office in Garland, Texas, truthfully disclosing his financial condition including his income.
The government presented evidence at trial that from July 1993 through February 2001, McBirney engaged in a scheme to defraud the FDIC of its right to payment under the $7.5 million restitution order and the $8.5 Million civil judgment by using the Oslin Nation Trust as his alter ego. McBirney conducted his business as a consultant and investor through the trust and had the trust pay his personal expenses, including transportation by a chauffeur-driven limousine, lodging, property taxes, interest, utilities, repairs, maintenance, legal fees and accounting fees. McBirney fraudulently concealed in excess of $1 million in income payable to him by causing it to be paid instead to the trust. Evidence was also presented that McBirney made false monthly reports to the U.S. Probation Office concealing hundreds of thousands of dollars.
Witnesses for the government testified that in March, 1994, McBirney transferred a $310,000 Treasury Certificate from Tangent Corporation, a corporation he owned, to the Oslin Nation Trust. In October 1995, McBirney caused the trustee to sell that security. In May 1994, McBirney caused the trustee to purchase a condominium in South Padre Island, Texas. In January 1996, McBirney caused the trust to purchase his former residence for him located at 6218 Raintree Court in Dallas. More than five years later, in December 2001, the trustee sold the Raintree Court residence for $800,000 which resulted in a profit of $153,445.05 paid to the Oslin Nation Trust, from which sale $100,000 was paid by the trustee to E&G Enterprises, Ltd., a limited partnership that McBirney controlled, which then purchased and operated a bar in the Dallas area.
In March 1996, McBirney, transferred his 5 percent ownership interest in a real estate joint venture to the Oslin Nation Trust and that between March 1998 and December 1999, the joint venture sold approximately 78 acres of real property in Collin County for $1,716,000, for which the trust received payments totaling almost $194,000.
The government presented evidence at trial that between February 1999 and February 2001, McBirney caused the trustee to pay out $2,0054.336 in checks and fund transfers to be paid out of the Oslin Nation Trust bank account for McBirney's expenses, with the intent of concealing the source of the income to the trust from the FDIC.
US Attorney Roper said, "Mr. McBirney's second chapter as a fraudster has come to an end. This office will prosecute anyone trying to dupe the federal government by hiding assets that are due as restitution." Mr. Roper praised the cooperative investigative work conducted by the Department of Justice, the FDIC Legal Division, the FDIC Office of Inspector General, and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Joseph M. Revesz and Special Assistant United States Attorney David A. Beck, FDIC.
Last Updated 2/9/06