Archives For Kentucky

Michael Todd Barrick, aka Kentuckyana Jones, 56, Smiths Grove, Kentucky, pleaded guilty to five counts of bank fraud on Monday.

According to Barrick’s plea agreement and other documents filed in the case, in 2007 Barrick and his co-defendant, Roger Hagan, agreed that Hagan would purchase property at 302 Laurel Street, Smiths Grove, Kentucky from Barrick for $575,000, but Barrick would make all loan payments and keep all rental income.  Hagan did not have sufficient assets and income to qualify for the loan, but at Barrick’s direction Hagan submitted a fraudulent financial statement to American Bank & Trust (AB&T) that substantially overstated Hagan’s assets and income.  Based on these fraudulent representations, AB&T approved Hagan for the loan.  Barrick paid Hagan’s $118,977.50 loan down payment, and gave Hagan $21,422.50 as payment for participating in the transaction.  The loan went into default in November 2010.

In 2008, Hagan entered a similar agreement with Barrick to purchase 708 Kelly Road, Bowling Green, Kentucky for $300,000.  At Barrick’s direction, Hagan again submitted a fraudulent financial statement to PBI Bank.  Based on these fraudulent representations, PBI approved Hagan for the loan.  After the loan closed Barrick paid Hagan $6,534 for participating in the transaction, and the loan went into default in March 2010.

In 2011, Barrick recruited co-defendant Lorri Hughes to purchase a Wholesale Mattress Warehouse (WMW) from Barrick for $179,000.  The WMW was purportedly located at 1700 N. Dixie Highway in Louisville, but in reality a McDonalds restaurant operated at that address, and had been there for many years.  At Barrick’s direction, Hughes submitted a fraudulent financial statement to Monticello Bank that substantially overstated her income and assets.  Based on these fraudulent representations, Monticello Bank approved the loan, and after the loan closed Barrick paid Hughes $20,000 for participating in the transaction.  The loan went into default in February 2012.

In 2010, Barrick recruited T.P. to purchase Som’ Beach Tanning (SBT), a business located at 140 River Place Avenue, Bowling Green, Kentucky from Barrick.  At Barrick’s direction, T.P. submitted a fraudulent financial statement to Monticello Bank that substantially overstated his assets.  The loan was supposed to be collateralized by SBT’s equipment, but Barrick had already used that equipment as collateral in a separate December 2009 loan from BB&T Bank, and that BB&T loan was not satisfied.  Based on these fraudulent representations, co-defendant Garry Hammer, a Monticello Bank loan officer, approved the loan, and after the loan closed Barrick paid T.P. $5,000 for participating in the transaction, but Barrick never surrendered control of the business.

In late 2010, Barrick recruited R.R. to purchase a Mattress City Wholesale (MCW) from Barrick for $179,880.  Under the terms of their agreement, R.R. would own the business on paper and would receive a small percentage of profits, but Barrick would pay the taxes, insurance, and all loan payments, and would receive the majority of profits.  The paperwork Barrick submitted reflected that the MCW was located at 2201 Gallatin Road, Madison, Tennessee.  In reality, a PetSmart was located at that address, and had been there for many years.  Based on these fraudulent representations, Monticello Bank, through co-defendant Garry Hammer, approved the loan.  After the loan closed, Barrick paid R.R. $30,000 for participating in the transaction, and used a significant portion of the remaining proceeds to pay off T.P.’s SBT loan.  The R.R. loan went into default in February 2012.

Barrick’s codefendants, Roger Hagan, Lorri Hughes, and Garry Hammer, all pleaded guilty in April.

Barrick is scheduled to be sentenced by United States District Court Judge Joseph McKinley in Bowling Green on August 15, 2019, at 9:30 a.m., and faces a statutory maximum penalty of 150 years in prison.  Barrick also stipulated to a loss of over $1.4 million. Roger Hagan, Lorri Hughes and Garry Hammer are all scheduled to be sentenced in Bowling Green on July 9, 2019.

The announcement was made by United States Attorney Russell M. Coleman.

This case is being prosecuted by Assistant United States Attorneys David Weiser and Josh Judd and was investigated by the Federal Deposit Insurance Corporation (FDIC) and the FBI.

Matt Garner, 34, licensed real estate appraiser, Lexington, Kentucky, was sentenced in federal court to five months in prison and five months home confinement. He was also ordered to pay a $5,500 fine. Garner pled guilty in May of 2017 to conspiracy to commit wire fraud and making false statements to a federal agency,

Garner made false statements in connection with appraisals he submitted for use by lenders in connection with federally-backed mortgages.

Garner owned and operated Lexington-based Garner & Associates. Between 2012 and 2016, his company was paid for more than 700 appraisals, on homes being purchased or refinanced in numerous counties surrounding Lexington and Owensboro, Kentucky. In his guilty plea, acknowledged that, in a significant percentage of these appraisals, he falsely certified on federal appraisal forms that he had personally visited the property and conducted the appraisal.  In fact, had paid unlicensed individuals a small portion of the appraisal fee to perform the appraisals.

Senior U.S. District Court Judge Joseph M. Hood sentenced Garner. Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, and Amy S. Hess, Special Agent in Charge, Federal Bureau of Investigation, Louisville Field Office, announced the sentence today.

The Louisville Division of the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Ken Taylor and Kate Anderson represented the federal government

Matt Garner, appraiser, Lexington, Kentucky, was indicted and charged with conspiracy to commit wire fraud and false statement in a matter within the jurisdiction of an agency of the United States based on allegations that he used unlicensed surrogates to conduct residential real property appraisals under his name and license.

According to the indictment, in 2015, Garner began an illegal and deceptive practice of using uncertified and unlicensed surrogates, including two individuals identified in the indictment as GD and ZG, to perform appraisals and fill out Uniform Residential Appraisal Reports without attributing the reports to those individuals or identifying their involvement.  In most instances, Garner never visited the property.  He paid the surrogates a portion of his appraisal fee.

The indictment further alleges that Garner instructed his surrogates to pretend to be him if questioned by anyone during the appraisal process and he provided them with his own business cards to provide to others, if necessary.

By doing this, Garner was able to greatly increase the number of appraisals he could perform in a given time.

According to the indictment, Garner made the following material statements by signing and submitting the appraisal reports performed by surrogates:

  1.  That he had personally performed the appraisal;
  2. That he had not been assisted by any other person in performing the appraisal;
  3. That he was knowledgeable of and experienced in the market where the property was located.

*CORRECTION:  This article originally stated that Garner was charged with bank fraud.  He was actually charged with violation of 18 USC 371 – conspiracy and the underlying substantive offenses are identified as wire fraud in violation of 18 USC 1343 and false statements in a matter within the jurisdiction of an agency of the United States in violation of 18 USC 1001.

Michael P Kennedy was indicted by a Kentucky grand jury and charged with one count of bank fraud.

Kennedy was part owner and manager of Kennedy Homes LLC, Fort Mitchell, Kentucky, which contracted to construct new homes in the Northern Kentucky and Cincinnati Ohio areas.

The indictment alleges that, in January 2011, Kennedy Homes, entered into a construction management contract to build a new single family home on Grandin Riverview in Cincinnati, Ohio.  A family member agreed to obtain a construction loan for $2.8 million dollars to fund the costs of labor, materials and tools to be provided by Kennedy Homes. The family member obtained a construction loan from Fifth Third Bank.  Funds would be released upon submission of draw requests accompanied by a contractor’s affidavit entitled “Lien Waiver and Contractor’s Affidavit” which certified that Kennedy Homes and its subcontractors and suppliers had been paid in full, with the exception only of claims specifically listed on the form. Between January 2011 and August 2012, according to the indictment, Kennedy submitted false affidavits swearing that he had paid subcontractors, materialmen and laborers to date, except for those listed, which he swore he would pay with the proceeds of the draw request.  According to the indictment, he knew that the subcontractors and suppliers had not been paid.  Kennedy used some or all of the draw money to pay subcontractors, materialmen and laborers on other projects or to pay salaries to himself or other partners of Kennedy Homes.

Also, according to the indictment, in July 2011 Kennedy entered into a Building Construction Agreement on behalf of Kennedy Homes to build a home on Serenity Way in Edgewood, Kentucky for $975,000.  The homeowners obtained a $925,000 construction loan from Guardian Savings Bank to pay for the construction. Between July 2011 and July 2012, Kennedy executed false affidavits swearing that he had paid all materialmen and suppliers, knowing that they had not, in fact, been paid.  Kennedy used some or all of the draw money to pay subcontractors, materialmen and laborers on other unrelated projects or to pay salaries to himself or other partners of Kennedy Homes.

If convicted, Kennedy could be sentenced to a maximum term of 30 years in prison.

Brady Bunte, the former owner of an Orange County, California mortgage lending company, pleaded guilty to bank fraud in U.S. District Court in Louisville, Kentucky in a warehouse lending fraud.  Bunte devised a scheme to defraud National City Bank of $12,744,678 of money under its control, by submitting fraudulent funding requests for nonexistent mortgage loans. Continue Reading…

Russell N. Daniel, 63, Louisville, Kentucky, a purported real estate entrepreneur, was sentenced to 37 months in federal prison and was ordered to pay $2,797,000 in restitution for a single count of mail fraud connected to real estate schemes that resulted in the loss of more than $1 million to investors.

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Dane Little, Jeffersonville, Indiana, was sentenced to 15 months in prison and ordered to pay $487,111 in restitution after pleading guilty to engaging in a conspiracy, with five indicted co-defendants, to commit bank and wire fraud.

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