TOPEKA, KAN. - A Topeka man has pleaded guilty to federal bank fraud charges in connection with a plan to build an apartment complex in Junction City, U.S. Attorney Barry Grissom said today.
John Wyatt Duncan, Jr., 52, Topeka, Kan., pleaded guilty to two counts of bank fraud, one count of money laundering and one count of making false statements in documents required by the Employee Retirement Income Security Act (ERISA).
In court documents, Duncan was alleged to have obtained a $15.2 million construction loan for the purpose of constructing Quinton Pointe Apartments in Junction City. He was required to provide $1,225,000 in collateral. He signed a letter to the lender, University National Bank of Lawrence, Kan., falsely stating that lumber for the construction of the apartment complex, representing collateral for the loan, was prepaid in full and being held by Schmidt Builders, a company for which he was chief executive officer. He instructed employees of Schmidt Builders to create a false invoice in an amount of more than $1.3 million to a company he owned called Blue Jay Properties LLC in order to create the false appearance that Blue Jay Properties had prepaid Schmidt Builders for the lumber.
In another count, Schmidt Builders acquired a $12 million line of credit loan from Kaw Valley National Bank of Topeka and agreed to provide the bank with monthly financial reports. Duncan submitted reports to the bank containing false information about the age of certain accounts receivable and the amount of inventory on hand.
Sentencing is set for Dec. 16. He faces a maximum penalty of 30 years and a fine up to $1 million on each of the bank fraud counts, a maximum penalty of 10 years and a fine up to $250,000 on the money laundering and a maximum penalty of five years and a fine up to $250,000 on the count of making false statements. Grissom commended the Internal Revenue Service, Criminal Investigations Division; the Federal Deposit Insurance Corporation, Office of Inspector General; the Federal Reserve Board, Office of Inspector General; the U.S. Department of Labor and Assistant U.S. Attorney Duston Slinkard for their work on the case.
Source: U.S. Department of Justice, Office of the United States Attorneys
