Home Entertainment industry Kansas City payday loan mogul pleads bankruptcy fraud

Kansas City payday loan mogul pleads bankruptcy fraud

12
0

Del Kimball, a prominent figure in The Kansas City Payday Loan Scene, waived a federal indictment on Tuesday afternoon and pleaded guilty to a bankruptcy fraud charge.

Kimball, 53, appeared with his lawyer, JR Hobbs, before U.S. District Court Judge Beth Phillips, who accepted Kimball’s guilty plea. He is to be sentenced on June 2; he will remain on bail until then, as long as he does not travel outside of the Kansas City area and surrender his passport.

He faces no more than five years in prison and up to $ 250,000 in fines.

The charges against Kimball stem from his 2015 personal bankruptcy case.

Kimball, along with a downtown Kansas City payday loan company he co-owned, LTS Management, were forced into involuntary bankruptcy by creditors claiming to owe millions of dollars in payday loan investments. .

In 2017, a bankruptcy trustee accused Kimball of concealing assets, bank accounts and income from his bankruptcy declarations. Debtors in bankruptcy are expected to reveal all aspects of their financial situation.

These omissions, according to the trustee, included his sale of a warehouse for nearly $ 1 million, the sale of three cars for over $ 120,000, eight wristwatches worth over $ 29,000 and a painting by Rolling Stones guitarist Ronnie Wood.

The criminal charge against Kimball said he did not disclose the transfer of money to a relative and the existence of a company he owned that was formed to conceal the income from creditors.

In his involuntary bankruptcy proceeding, Mr. Kimball failed to make the required full disclosures, ”said a statement from his attorneys, Hobbs and Marilyn Keller. “He accepts responsibility and will cooperate with the PSR process as sentencing approaches.”

LTS Management has had difficult times after a Justice Department initiative launched in 2013 called Operation Chokepoint prompted banks to avoid doing business with companies considered to be at high risk of fraud, such as debt consolidation and payday loans.

LTS Management creditor NorthRock LLC loaned Johnson County businessman Joel Tucker $ 32.2 million with a deal that he would use the loan proceeds to fund lending operations on LTS Management salary.

Joel Tucker is the brother of Scott Tucker, a former racing car driver from Leawood who is serving a 16-year prison sentence for running a separate payday loan business according to federal prosecutors. exploited 4.5 million customers with illegal loans. Joel Tucker himself awaits sentencing after his guilty plea to federal charges he sold fake consumer loan portfolios to debt collectors, who then tried to get people to pay off debts they didn’t have.

NorthRock sued Kimball, his business partner Sam Furseth and LTS Management in Jackson County in 2014, claiming they did not honor the funding agreement when LTS Management stopped paying the original NorthRock loan.

NorthRock went on to win a $ 35 million judgment against them. NorthRock in 2018 also went bankrupt, claiming he had $ 120 million in claims and judgments he could not collect.

NorthRock is partly owned by Arizona businessman David Harbor currently under federal indictment for allegedly defrauding investors by promising that he would use their money to invest in payday loan business in exchange for high rates of return later, but instead pocketed the proceeds to fund his lavish lifestyle.

In November 2020, federal prosecutors filed an alternative indictment against Harbor, alleging, among other things, that Harbor had raised investments in Joel Tucker’s payday lending business without disclosing that he would collect fees from 25% research.

Kansas City Star Related Stories

Steve Vockrodt is an award-winning investigative journalist who has worked in Kansas City since 2005. His areas of interest include business, politics, justice issues, and late-breaking investigations. Vockrodt grew up in Denver and studied journalism at the University of Kansas.