A former vice president at a Wichita Falls bank has been sentenced to four years in federal prison for her role in a scheme involving fraudulent Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) applications, according to an announcement from United States Attorney for the Northern District of Texas Ryan Raybould.
Kaylee Ree Lunn, 37, of Holliday, Texas, pleaded guilty in July 2025 to one count of wire fraud related to several fraudulent PPP loans she submitted during 2020 and 2021. On December 5, Chief United States District Judge Reed C. O’Connor sentenced Lunn to forty-eight months in prison. She was also ordered to pay restitution totaling $573,444 to the Small Business Administration and more than $19,000 to her former employer, Prosperity Bank (formerly First Capital Bank).
Court records show that while serving as vice president of commercial lending at First Capital Bank’s Wichita Falls branch, Lunn accessed personal and business financial information of certain customers without their knowledge or consent. She used this information to apply for four fraudulent PPP loans and a commercial loan between late 2020 and mid-2021. The applications included false or inflated income and payroll expense figures. More than $276,000 in loan proceeds were diverted into accounts controlled by Lunn.
Lunn also applied for and received over $140,000 in additional fraudulent PPP loans by falsely listing business entities as belonging to her husband. During this period, she attempted unsuccessfully to obtain several EIDLs totaling more than $890,000 using fraudulent information; these applications were ultimately rejected. According to plea documents, Lunn spent thousands of dollars from the fraudulently obtained loans on personal expenses.
The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation through its Amarillo Resident Agency. Assistant United States Attorney Mark (“Mac”) McDonald prosecuted the case.
