A former vice president at a Wichita Falls bank has been sentenced to four years in federal prison for orchestrating a scheme involving fraudulent Paycheck Protection Program and Economic Injury Disaster Loan applications, according to the U.S. Attorney’s Office for the Northern District of Texas.
Used Customer Information To File Fake Loan Applications
Kaylee Ree Lunn, 37, of Holliday, Texas, pleaded guilty in July 2025 to one count of wire fraud. Prosecutors said that while working as vice president of commercial lending at First Capital Bank, now Prosperity Bank, Lunn misused confidential financial data belonging to bank customers to submit a series of fraudulent loan applications.
Between late 2020 and mid-2021, she filed four PPP loan applications and a commercial loan using inflated revenue and payroll figures, routing more than $276,000 in loan proceeds into accounts she controlled. Investigators said the customers had no idea their information was being used.
Additional Fraud Attempts and Personal Spending
Court records show Lunn also submitted PPP loan applications totaling more than $140,000 under business entities she falsely claimed belonged to her husband. She separately attempted to secure more than $890,000 in EIDL loans, though those applications were denied after being flagged as fraudulent.
According to her plea documents, Lunn used thousands of dollars in loan proceeds for personal spending and lifestyle expenses.
Restitution Ordered
Chief U.S. District Judge Reed C. O’Connor sentenced Lunn on December 5, 2025, ordering her to serve 48 months in federal prison. She was also ordered to pay $573,444 in restitution to the Small Business Administration and more than $19,000 to Prosperity Bank.
The FBI’s Dallas Field Office, through its Amarillo Resident Agency, led the investigation. Assistant U.S. Attorney Mark “Mac” McDonald prosecuted the case.
