Higginsville Business Owner Pleads Guilty to $2.8 Million Bank Fraud
|U.S. Attorney’s Office November 28, 2012|
KANSAS CITY, MO—David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced the owner of a defunct Higginsville, Missouri body shop pleaded guilty in federal court today to bank fraud.
“This fraud scheme involved two banks that received funds from the Troubled Asset Relief Program, or TARP,” Ketchmark said. “TARP was designed to help financial institutions recover from the economic downturn, not to provide a cash cow that dishonest business owners could plunder. We will hold those accountable who steal from public funds.”
Clint Edward Dukes, 35, of Mayview, Missouri, waived his right to a grand jury and pleaded guilty before U.S. District Judge Dean Whipple to a federal information that charges him with bank fraud. Dukes was the owner of Dukes Auto Repair in Higginsville from 2004 to 2011.
By pleading guilty today, Dukes admitted that he engaged in a scheme to defraud First Community Bank, U.S. Bank, and First Central Bank from March 2004 to July 2011. In order to obtain approximately $2.8 million in loans from these banks, Dukes falsely claimed to have contracts with the state of Missouri for car repair work and submitted fraudulent invoices to the banks. Dukes filed false financial disclosure statements with these banks to conceal the fact that he used loans from each bank to extinguish previous loans made from the other banks.
First Community Bank and U.S. Bank received funds from the U.S. Department of the Treasury’s Troubled Asset Relief Program (TARP).
“Clint Dukes’ crime resulted in losses of more than $2 million for three banks, two of which were TARP banks, one delinquent on its TARP dividends in that same amount,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Dukes used falsified invoices for non-existent car repair work through his business to secure loans from the banks totaling nearly $3 million, more than two-thirds of which was never repaid. All fraud involving TARP is fraud that exploits taxpayer dollars, and SIGTARP, along with our law enforcement partners, will bring to justice those responsible for TARP-related crime.”
On May 19, 2009, the parent company of First Community Bank (First Community Bancshares Inc. of Overland Park, Kansas) received $14.8 million through TARP. As of September 30, 2012, the $14.8 million taxpayer investment in the bank remained outstanding, and the bank had missed 10 additional dividend and interest payments totaling more than $2 million. On November 14, 2008, the parent company of U.S. Bank (U.S. Bancorp of Minneapolis, Minnesota) received nearly $6.6 billion in TARP funds. The bank repaid the funds in full on June 17, 2009.
Dukes’s bank fraud scheme resulted in an actual loss of $2,053,949 to these financial institutions. Under the terms of today’s plea agreement, Dukes must pay a money judgment in that amount to the government as forfeiture of the proceeds of his criminal activity.
Under federal statutes, Dukes is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney William L. Meiners and Lafayette County Prosecuting Attorney Kellie Wingate Campbell, who has been designated a Special Assistant U.S. Attorney in this case. It was investigated by the Higginsville, Missouri Police Department, the FBI, and the Office of the Special Inspector General for the Troubled Asset Relief Program.