When a business obtains a loan from a lender for a specific purpose, the business is required to use the borrowed money for that particular purpose. If the business owner or managing officers of the business decide to use the loan for something other than the specified purpose, he or she may be guilty of committing fraud. The managing director of Bear Creek Capital LLC and Kenwood Towne Place LLC is being accused of illegally diverting lender money. He faces 25 counts in an Ohio court with charges, including wire fraud, mail fraud and bank fraud.
The incident surrounds a 48-year-old executive who reportedly told the lender that funds were being utilized to develop Kenwood Towne Place, but in reality he was using the borrowed money for other purposes. Personal enrichment appears to be at least a part of his motive for committing the fraudulent actions. The prosecution alleges that the man received millions of dollars from Bank of America in 2007 as a loan to pay for the construction of Kenwood Towne Place. However, the construction of the office building stopped around late 2008, leaving the building only partially completed.
Allegedly, the executive illegally transferred around $2,835,161 of the funds from Bear Creek Capital to himself and other business entities. The prosecution is seeking to take any proceeds the executive had received as a result of the fraudulent behavior. The indictment specifically named two investment accounts, money received from selling real estate and three jewelry items. Authorities claim that they had investigated the man for three years before moving forward with the indictment.
The charges against the executive include one count of conspiracy to commit bank fraud and one count of bank fraud. He is also being charged with seven counts of wire fraud and seven counts of mail fraud. Eight counts of money laundering and one count of obstruction were also included in the indictment in Ohio. However, the executive is presumed innocent until proven guilty and will have a chance to defend himself in the court of law. The burden of proof always rests upon the shoulders of prosecutors in such criminal cases.
Source: Examiner.com, “Kenwood managing director indicted for fraud, conspiracy ,” Joel Hendon, Nov. 16, 2012