Former Owners of New Horizon LLC Indicted for Fraud
United States Attorney James L. Santelle announced that on February 18, 2015, a grand jury sitting in the Eastern District of Wisconsin returned a fifteen count indictment against the former owners of New Horizon, LLC, a title and closing company that operated in Brookfield, Wisconsin from 2006 to 2011.
The indictment charges Timothy Kugler, 43, of West Bend, Wisconsin, Lisa Verken (formerly known as Lisa Kugler), 41, of West Bend, Wisconsin, and Michelle Hayes, 46, of Wauwatosa, Wisconsin. Each person is charged with participating in a bank fraud conspiracy, in violation of Title 18, United States Code, Section 1349, and with multiple counts of bank fraud, and false tax returns, in violation of Title 18, United States Code, Section 1344 and Title 26, United States Code, Section 7206(1).
The indictment alleges that Kugler, Verken, and Hayes executed their fraud scheme by diverting more than $1.8 million of lender funds from the New Horizon escrow account into a separate account from which they issued checks to themselves and to each other. To conceal the fraud, the defendants withheld settlement disbursements and falsely told bank employees that overdrafts in the escrow account were the result of delayed wire deposits from funding lenders. The indictment further alleges that the defendants altered bank statements to conceal the fraud from auditors working on behalf of their insurance underwriter, First American Title Insurance Company.
The tax counts are the result of the defendants’ failure to claim the embezzled funds on tax returns filed for the 2008 and 2009 tax years. If convicted, each defendant faces up to 30 years in prison and a $1,000,000 fine for the bank fraud conspiracy and each of the separate bank fraud counts, and up to five years in prison and a $100,000 fine for each of the tax counts.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division. The case is assigned to Assistant United States Attorney Carol L. Kraft for prosecution.
An indictment is merely the formal method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.