A former Lawrence banker has been sentenced to five years in prison and ordered to pay more than $4 million in restitution for a federal fraud case dating back to 2007.

Troy A. Gregory, 53, of Lawrence, was sentenced by Chief U.S. District Judge Julie Robinson on Tuesday to 60 months in prison followed by three years of supervised release. In addition, Gregory was ordered to pay $4.7 million in restitution.

Following a two-week trial in August 2019, Gregory was found guilty of four counts of bank fraud and two counts of false statements. At the time of the crimes, Gregory was an executive and loan officer at Lawrence’s University National Bank, according to an indictment in the case.

According to the court, Gregory had made loans worth millions of dollars to a group of borrowers who were struggling to make payments on their loans. Beginning in late 2007, Gregory started the process of making $15.2 million in construction loans to the same group of borrowers for a Junction City apartment complex. Gregory’s bank shared this loan with 25 other Kansas banks.

The jury found that Gregory made or caused other people to make false statements to the banks about the strength of the borrowers, the debt status of the apartment property and the existence of about $1.7 million in certificates of deposit for collateral on the loan, all to get the loan approved.

Instead of using the loan funds promised for building the apartments, Gregory immediately diverted more than $1 million of the loan to pay for part of the certificates of deposit pledged as collateral, pay off debt on the apartment property and make payments on unrelated loans.

The banks who had participated in the loan collectively lost approximately $5 million on the fraudulent loan, the U.S. Attorney’s office has announced.