A Houston man has been sentenced to 10 years in federal prison for laundering proceeds from a large-scale bank fraud scheme, according to U.S. Attorney Nicholas J. Ganjei.
Bun Khath, 44, pleaded guilty on February 11, 2025. U.S. District Judge Keith Ellison ordered Khath to serve 120 months in prison followed by three years of supervised release. During the sentencing hearing, evidence was presented showing that the bank fraud scheme involved over $60 million in loans and that Khath directed multiple participants, including bankers, co-defendants, tax preparers, and borrowers. The court also heard about alleged Medicare fraud committed by Khath while he was out on bond. In delivering the sentence, the court described the offense as a heinous crime.
Khath admitted as part of his plea that he opened and managed shell companies and bank accounts to collect money from the scheme. He acknowledged laundering funds by wiring them to accounts controlled by his coconspirators.
The scheme involved submitting loan applications with false information and supporting documents such as fabricated equipment sales invoices, income tax returns, and financial statements.
Khath had previously been released on bond but was taken into custody after sentencing. He will remain in custody until he is transferred to a Federal Bureau of Prisons facility.
Another individual charged in connection with the case, Hugo Villanueva, 71, was recently apprehended in Peru and is expected to be extradited soon.
The investigation was conducted by several agencies: Federal Housing Finance Agency-Office of Inspector General, IRS-Criminal Investigation, FBI and Federal Deposit Insurance Corporation-OIG. Assistant U.S. Attorney Belinda Beek prosecuted the case.
The U.S. Attorney for the Southern District of Texas prosecutes federal crimes and handles civil cases for the government across a region covering 43 counties with more than nine million residents through offices located in Houston, Galveston, Corpus Christi, Laredo, McAllen and Brownsville. The office employs over 200 attorneys and operates under the U.S. Department of Justice led by the Attorney General (source). Notable former leaders include Alamdar Hamdani (2022–2025) and Ryan Patrick (source).
