A Houston man has been sentenced to 10 years in federal prison for laundering money from a large-scale bank fraud scheme, according to an announcement by 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, the court reviewed evidence that the 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 considered allegations of Medicare fraud committed by Khath while he was out on bond. In delivering the sentence, Judge Ellison described the offense as “a heinous crime.”
Khath admitted as part of his plea that he created and managed shell companies and bank accounts to collect proceeds from the scheme. He acknowledged laundering funds by wiring them to accounts controlled by coconspirators.
The fraud 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 detained 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: the 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 operates under the Department of Justice and serves under the Attorney General (official website). The office focuses on prosecuting federal crimes and handling civil cases for the government (official website). It employs more than 200 attorneys across offices in Houston, Galveston, Corpus Christi, Laredo, McAllen and Brownsville (official website), covering 43 counties with a population exceeding nine million (official website). Notable former leaders include Alamdar Hamdani and Ryan Patrick (official history page).
