Payday Credit Company Owner Convicted of Bankruptcy Fraud | USAO-WDMO

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KANSAS CITY, MO. A federal court today sentenced a Mission Hills, Kansas man under a bankruptcy fraud scheme related to his online loan.

“Ironically, the one who made a fortune on loans to other people tried to deceive their own creditors,” she said. US Attorney Theresa Moore. “This business owner engaged in a two-year scheme of lies and deception during bankruptcy proceedings, secretly holding assets instead of paying what he owed. The bankruptcy system relies on the honesty, openness and accuracy of debtors, and in return gives those debtors the opportunity to start over and get out of debt. This defendant mocked the system in the hope that he could pay off more than $ 7.5 million in debt while maintaining a luxurious lifestyle. ”

Del Hodges Kimball, 54, was sentenced by US District Judge Stephen R. Bowe to one year and one day in federal prison without parole. The court also ordered Kimball to pay $ 909,323 in damages.

“This verdict should convince others that such behavior and behavior is not acceptable in the bankruptcy system,” said US Acting Trustee Daniel J. Casamatta.

On January 19, 2021, Kimball pleaded guilty to one count of bankruptcy fraud. Kimball admitted that he was involved in a scheme to defraud the Bankruptcy Court by hiding assets, bank accounts and claims against third parties, and by making false statements and material omissions about his assets and financial transfers to and from third parties.

Three of Kimball’s creditors filed for bankruptcy filing against Kimball, his partner, and their company, LTS, an online payday loan based in Kansas City on August 5, 2015. The amount of claims of three creditors amounted to more than $ 15 million.

The U.S. bankruptcy trustee filed a complaint against the dismissal of Kimball on March 10, 2017, and the bankruptcy court held court proceedings on January 11, 2018. Following the trial, U.S. bankruptcy judge Cynthia Norton ruled that Kimball transferred property with intent to obstruct, detain, or defraud creditors, swore numerous false oaths in connection with this bankruptcy case, and concealed property from the bankruptcy estate. He did not disclose the assets until he was caught and had no choice. The court found the evidence that Kimball had made false statements under oath was “irrefutable”. The court refused to dismiss Kimball due to his willful cover-up.

For example, Kimball did not disclose $ 86,200 in transfers to friends and family. He underestimated the $ 24,000 collectibles. He skipped transfers to Claw Consulting, LLC, another company he owned (no employees). Kimball opened a bank account for Claw Consulting and ordered bank statements to be mailed to a lawyer at the attorney’s office address to hide income and sales proceeds that he wanted to hide from creditors.

According to court documents, Kimball claimed to have lost millions of dollars in 2013 and 2014, when in fact his gross income was $ 213,231 in 2014 and $ 158,679 in 2013.

From 2015 to 2018, Kimball arranged for the payment of $ 479,585 of the company’s paycheck and / or profits from Red Stag Holdings to his wife’s personal bank account to hide payments from creditors and the Bankruptcy Trustee. Kimball arranged for the payment of $ 45,300 in company income and / or profits from S. Bean Finance and $ 16,300 from Agile Fish to his wife’s personal bank account to hide the money from creditors and the Bankruptcy Trustee.

Kimball did not initially or fully plan to transfer and sell his stake in Red River Exploration for $ 116,280, as well as his ownership or interest in a number of companies.

The case was led by Assistant US Attorney Kathleen D. Mahoney. This was investigated by the FBI and the US Bankruptcy Office.

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