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 applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). The announcement was made by United States Attorney for the Northern District of Texas Ryan Raybould.
Kaylee Ree Lunn, 37, from Holliday, Texas, pleaded guilty in July 2025 to one count of wire fraud. Her conviction stems from several fraudulent PPP loan applications she submitted during 2020 and 2021. On December 5, 2025, Chief United States District Judge Reed C. O’Connor sentenced Lunn to forty-eight months in prison. She was also ordered to pay $573,444 in restitution to the Small Business Administration and more than $19,000 to Prosperity Bank, formerly known as First Capital Bank.
According to court records, 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. Lunn admitted to submitting false or inflated income and payroll figures on these applications and diverting over $276,000 in loan proceeds into accounts she controlled.
Records also show that Lunn applied for and received more than $140,000 in fraudulent PPP loans by falsely listing the businesses as belonging to her husband. During this period, she also attempted unsuccessfully to secure EIDL loans totaling over $890,000 using fraudulent information; these attempts were rejected. Plea documents state that Lunn spent thousands of dollars from the illicitly obtained funds on personal expenses.
The Federal Bureau of Investigation’s Dallas Field Office through its Amarillo Resident Agency conducted the investigation. Assistant United States Attorney Mark (“Mac”) McDonald prosecuted the case.
