[1]Two Kansas men were indicted on multiple charges of defrauding a bank that was receiving government assistance out of more than $877,000, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP [2]) Christy Romero and U.S. Attorney for the District of Kansas [3] Barry Grissom announced recently.
According to Romero and Grissom, the two men indicted were K. Kevin James, 57, and his son, Charlie M. James, 35, both Kansas residents and co-owners of KC United, a Kansas City-based holding company for five construction services companies.
The charges involve an alleged defrauding of Bank of Blue Valley [4], a bank that was receiving assistance in the form of federal taxpayer funds from the U.S. Department of the Treasury's Troubled Asset Relief Program (TARP [5]). The older James was indicted on 10 counts of bank fraud, eight counts of wire fraud, and one count of conspiracy to defraud the U.S. The younger James was indicted on four counts of wire fraud, one count of conspiracy to defraud the U.S., three counts of tax evasion, and one count of bankruptcy fraud.
According to the indictment, Kevin James, as owner of KC United, allegedly misrepresented the failing financial state of his business after he and others obtained business loans from Bank of Blue Valley. The alleged fraud resulted in losses of $877,382 for the bank.
"When KC United’s construction business was losing money, its owner, Kevin James, allegedly directed that the company’s CFO cook the books to get more funding from Bank of Blue Valley, a bank that had recently been bailed out by taxpayers," Romero said in a prepared statement. "James allegedly ordered that the company’s financial statements be falsified to make it appear profitable to the bank, not once, but ten times from 2008 to 2011, resulting in the bank increasing the company’s line of credit to $2.8 million and renewing more than $1 million in the company’s outstanding loans. When worried that KC United’s external auditor would discover the scheme, James purportedly made a fake auditor letter approving the company’s financial statement, which was submitted to the bank. Bank of Blue Valley suffered losses on the loans and was unable to repay TARP or its quarterly TARP dividend, and eventually sold the loans at a loss of $877,000."