Neal Gordon Wall admitted in U.S. District Court in Paducah, Ky., that he had taken part in misusing a $5 million bank loan and a $500,000 loan from the Tennessee Valley Authority.

His sentencing date had not been entered on the court docket as of Monday night, but he could be sent to prison for up to 130 years followed by up to five years of supervised release. He also could be fined up to $2.5 million, be ordered to pay $4.6 million restitution and be ordered to pay $1,100 in a special assessment.

Wall and his co-conspirator, Lloyd Aaron Smith of Dyersburg, were accused of obtaining a $5 million bank loan in 2003 to buy equipment for Hickman Mills. Each defendant reportedly held a 25 percent ownership in the Hickman, Ky., textile mill. Neal served as the company's president.

Instead of buying equipment, prosecutors said the men used $700,000 to pay off personal debts and attempted to cover up that fact by creating false bills of sale.

Then, the indictment claimed, the men created fake bills saying Hickman Mills owed $133,999.97 for goods and services. That money was deposited into an account for Midway Homes, a business the men owned and operated.

Neal and Wall secured the $5 million loan by using Hickman Mills equipment as collateral. The Citizens Bank of Hickman, Ky., understood the mill owned the equipment free and clear from any other liens, security interest or encumbrances. In reality, the indictment said, the same equipment had been used as collateral for another $5 million loan from Union Planters Bank in Dyersburg in 2002.

The men also are accused of fraudulently obtaining a $500,000 loan from the Tennessee Valley Authority to buy a tenter and nine nappers for Hickman Mills. Instead, the men deposited the $500,000 check into a Dyer Fabrics bank account in Dyersburg. Documents mailed to TVA supporting the application constituted mail fraud, the indictment alleged.

Twelve money-laundering charges were also listed in the indictment to cover the checks transferring money from one account to another.

Smith pleaded guilty Oct. 13 to one count each of bank fraud and mail fraud and nine counts of money laundering. He is scheduled for sentencing on Jan. 14 in Paducah.