Former college CFO accused in $15 million fraud
CASPER — A lawsuit filed in federal court in late June alleges that Paul McCown, the former chief financial officer at Wyoming Catholic College, defrauded an investment firm out of $15 million.
According to the suit, filed by New York-based advisory firm Ria R Squared, McCown is accused of faking bank statements that falsely said his bank account had more than $750 million.
McCown allegedly used those statements and other falsified documents to leverage a $15 million loan from R Squared. The complaint in the suit also alleges McCown impersonated a real employee at Wyoming Community Bank to communicate with the firm using an email address and phone number not associated with the employee or the bank.
According WCC Vice President of Advancement Joseph Susanka, McCown resigned his position on June 25 after being placed on administrative leave on June 3 when the college learned of the allegations.
“Over the past month, to experience such a profound breach of trust by a leader of our institution, has been both embarrassing and painful for Wyoming Catholic College,” Susanka said. “However, an initial internal review by the College found no additional financial irregularities, and Wyoming Catholic College has neither been sued nor is a defendant to the suit.”
Ed McFadden, a strategic communications specialist representing WCC, said Wednesday that the college is not implicated in the suit. He confirmed the CFO position is still vacant.
Susanka said the other WCC employee named in the suit, who initially introduced McCown to R Squared and was later named in a transfer of around $700,000 from the loan to another firm, has also been placed on administrative leave.
Lawyers for R Squared did not respond to a request for comment on Wednesday. McCown, according to the case’s docket, has not yet retained counsel, and did not respond to an email seeking comment.
Court documents state McCown has been hard to get a hold of since the firm began investigating the alleged fraud, and has not responded to multiple communications from the firm’s lawyers and employees.
According to information in the complaint, McCown initially connected with the firm saying he was looking for advisory services for WCC’s endowment. In March, McCown allegedly told the firm he needed advising for his own investments, as he said he had just gotten an influx of personal wealth.
In May, McCown allegedly asked R Squared for a short-term loan of $10 million to cover an outstanding invoice for his business, McCown Enterprises LLC. McCown is the sole member of the corporation. The amount was later increased to $15 million.
Balances, attestation statements and other legal documents provided to R Squared were on Wyoming Community Bank letterhead, the suit states, which allegedly turned out to be falsified and did not match the bank’s.
The statements were made to show, according to the complaint, a deposit of $750 million into McCown’s account in March 2021. The final balance before receiving the loan was represented as over $761 million, which assured the firm McCown could easily repay it. According to the complaint, this type of loan is routinely used to cover business costs.
The suit also alleges McCown used a fake email address and phone number to impersonate the Lander branch’s vice president. While verifying information before granting the loan, the suit states, a representative from R Squared called the bank and was directed to the employee’s voicemail. According to the suit, that was used as verification even though no one at the firm spoke directly with the employee.
According to the complaint, documents were also allegedly notarized by a WCC employee, whom the suit states likely did not know about the alleged fraud.
R Squared makes eight claims in its suit, filed on June 22. Those include accusations of fraud, breaching the loan contract and financial damages to the firm. In the suit’s initial complaint, the firm’s lawyers call for an injunction to prevent any further transfers from the loan money.
An investigation reportedly found McCown has transferred nearly all of the money from the loan — besides less than $1 million unaccounted for — to various entities. Hundreds of thousands of dollars were reportedly sent to his own family members, the state of Wyoming and a financial services firm in the name of a college employee.
More than half a million dollars was also reportedly transferred to McCown’s personal account at Wyoming Community Bank. It appears it was then sent to Trolan, LLC, a Michigan-based company that the suit speculates may be owned by or affiliated with McCown, who is originally from Michigan.
The largest sum went to the college, in a $10 million anonymous donation. The college confirmed to lawyers it had received the money, and is now in the process of returning it, McFadden said.
Another $500,000 appears to have been transferred to a fund at Goldman Sachs, which also allegedly served as the transfer point for the $10 million donation.
All transfers also constitute a breach of the loan’s contract, the complaint says, since it stipulated McCown needed written permission from the firm to make any transfers from the account.