In 2000, a Houston jury found Lundy and Calumet's chief financial officer, Gary Matthews, guilty of intentionally and systematically defrauding the First City National Bank of Houston of $65 million in loans to Calumet through bribery and deceit. Sentenced by U.S. District Court Judge Sim Lake to serve a 4 1/2-year term, Lundy reported to the federal prison camp in Pensacola, Fla., in February 2001. Lake also ordered Lundy to make $20.4 million in restitution. Matthews, who received a 21-month sentence, was released from prison in December 2002, according to Federal Bureau of Prisons records. Calumet filed for bankruptcy and was sold at public auction in 1992. Henryk de Kwiatkowski purchased most of Calumet's land and continued to operate the farm until his death in 2003. A trust created by de Kwiatkowski now oversees Calumet's operations.
Former Calumet Farm president J.T. Lundy has not finished serving his prison sentence for bank fraud, conspiracy, and bribery convictions. But he attended this year's Keeneland September yearling sale, saying he was helping someone look at horses to buy.Lundy declined to comment further about his circumstances, but a spokesman for the Community Corrections Management Office in Nashville, Tenn., said Lundy is living in a Lexington halfway house. He must sleep there, but is allowed to leave to work, which is part of the process of integrating prisoners "back into the public," the spokesman explained.According to the Federal Bureau of Prisons, Lundy's projected release date is Jan. 4, 2005.