Bank seeks funds from former employee sentenced for fraud

John Suayan, Galveston Bureau Aug. 27, 2012, 9:19am

GALVESTON - Frost Bank has filed suit against a former employee to recoup approximately $100,000 in allegedly ill-gotten funds.

A lawsuit filed Aug. 13 in Galveston County District Court claims Michelle Lauryn Osteen, a former administrative assistant of the plaintiff at its Galveston branch, owes $97,216.45 which she obtained "in a fraudulent manner."

Osteen worked in the complainant's trust department at the time of the events in question.

According to the suit, the defendant "did knowingly and fraudulently obtain funds from a number of trust accounts administered by Frost."

"In the course of her employment, the defendant did knowingly execute and attempt to execute a scheme to defraud Frost Bank and to obtain monies, funds and other property owned by and under the custody and control of Frost Bank by means of materially false and fraudulent pretenses, representations and promises that her requests for disbursements from trust accounts in the form of Frost Bank checks were for legitimate expenditures typical for the trusts she helped manager, when in fact they were for her financial benefit," the original petition says.

Frost adds Osteen "did knowingly and without lawful authority" forged the name of the trust beneficiary J.C. on a money order on Nov. 13, 2008.

A criminal indictment containing 15 counts of fraud and one count of identity theft was filed against the respondent in the Southern District of Texas, Houston Division on Sept. 27, 2010.

Osteen executed a plea agreement on April 18, 2011, to which she agreed to plead guilty to bank fraud as well as pay full restitution to Frost "for all relevant conduct contributable to the defendant in the criminal proceedings regardless of the count of conviction."

She was found guilty on the bank fraud charge on Aug. 31, 2011, and ordered incarcerated within the U.S. Bureau of Prison system for a year and a day.

The defendant was to also undergo supervised release for three years upon the end of her sentence and remit the funds back to the complainant.

Frost insists they have not received the money to this day.

A jury trial is requested.

Attorney John H. Lane Jr. with John Lane & Associates in San Antonio is representing the plaintiff, and Galveston County 10th District Court Judge David Garner is presiding over the case.

Case No. 12-cv-1801

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