Ex-LV residents indicted on fraud charges

Kevin Rademacher

Friday, Feb. 6, 2004 | 11:21 a.m.

Three former Las Vegas residents have been indicted on fraud charges for allegedly operating an illegal loan scheme.

James D. Payne of Indianapolis, Michael McMunn of Horse Cave, Ky., and Stephen D. Ryan of Pound Ridge, N.Y., are accused of collecting large advance fees from victims in exchange for commercial loans they had no intention of funding, the U.S. Justice Department said Thursday.

Between April 1996 and August 2000, Payne owned and operated Stateline Capital Corp. in Las Vegas where McMunn and Ryan were employed. The indictment alleges that the the individuals told victims that they could obtain funding from overseas financial institutions.

The Justice Department has accused the three men of providing victims with false reference lists, obtaining contractual interests in the projects for which victims sought funding, advising the victims that advance fees would be held in escrow and creating a false paper trail to make it appear that financing was moving forward.

"The defendants knew that no potential borrowers had ever received a loan through Stateline," the Justice Department said in a statement.

They also failed to disclose that the attorney who would be holding their escrow funds had been disbarred for misuse of client funds, the Justice Department said.

A "substantial" portion of advance fees were moved from Stateline's bank accounts in Las Vegas to personal accounts of the defendants in London, Dublin, Ireland, and Riga, Latvia, the Justice Department said.

Payne was arrested in Thursday in Indianapolis. Ryan had not yet been arrested this morning, and a summons was issued for McMunn to appear in court on Feb. 13. The indictment was filed in U.S. District Court in Las Vegas.